Germans join in fight for Liffe

THE battle for Liffe has become a three-horse race, with Deutsche Bourse asking the London futures exchange for the chance to outline its case for a merger. The Frankfurt stock exchange operator will join the London Stock Exchange (LSE) and Continental exchange Euronext in presentations to the Liffe board that are expected to start on Thursday.

It is believed Deutsche Boerse's involvement means Liffe may choose to pursue negotiations with two suitors rather than immediately awarding preferred-bidder status to one.

The German exchange is understood to have held several discussions with Liffe about its plans but has refused to acknowledge its interest publicly.

Deutsche Boerse's cash kitty of about e1bn (£650m), compared with Euronext's e700m war chest, leaves it best placed to make a knockout bid. But the Boerse's strong position in cash derivatives would leave the combined group with a market share of up to 98%, raising the prospect of a deal being blocked on competition grounds.

Euronext is believed to have topped the LSE's indicative offer with a bid of £16 a share, valuing Liffe at about £500m. However, the LSE has the support of many of Liffe's members, who control about half the stock.