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Monday, 5 February, 2001, 20:09 GMT
Deutsche Börse surges on debut
Trader in action at the German stock exchange
Demand for shares has been extremely high
Shares in the Frankfurt stock market, Deutsche Börse, soared 11% on their debut, reflecting the huge interest shown in the flotation of the exchange.

On Monday the shares closed up 374 euros, from an issue price of 335 euros.

The float valued the exchange at more than 3.7bn euros (£2.36bn).

The surge in the share price followed huge demand for shares before the flotation - the stock was 23 times oversubscribed.

There has been speculation that London Stock Exchange may become a takeover target after Deutsche Börse raised 980m euros (£627m) through the float.

Werner Seifert
Werner Seifert: plans to bring the marketplace to London

But Werner Seifert, the chief executive of the exchange, told CNN: "We would invest the majority of the proceeds of the float in our existing businesses... that's our first priority."

When asked whether the proceeds would also be spent on purchasing a stake in the London Stock Exchange or Nasdaq, Mr Seifert said acquisitions was just one option open to the Deutsche Börse.

He also described mergers and cross-holding of shares in other exchanges as other alternatives to consider.

But he would not confirm if the exchange was in talks with the LSE or Nasdaq.

In a direct challenge to the LSE, Mr Seifert said, "We are interested in bringing our marketplace to London".

He added: "It's a matter of drawing business from London onto our platform."

Deutsche Börse winners

The major direct winners of share price gains will be institutional investors, mainly foreign, who represented 94% of subcribers for exchange shares.

The remaining 6% of Deutsche Börse stock has been allocated to private investors.

The flotation, which follows the listing of London's and Stockholm's main stock exchanges, will raise funds to help fund Deutsche Börse's development in a sector undergoing widespread consolidation.

Tougher competition and demands from big investors for lower trading fees are putting enormous pressure on stock exchange operators to join forces.

Stock markets in Amsterdam, Paris and Brussels merged last year to form the Euronext exchange, and further shake-ups in European markets are expected.

But traditional rivalries and disagreements over technology have proved formidable obstacles

Deutsche Börse itself attempted to merge with the London Stock Exchange last year, in a deal which floundered on opposition from City institutions.

Mr Seifert told CNN the failure of the merger was "nothing to do with the Deutsche Börse".

But Deutsche Börse is reported to have continued talks with the US tech-weighted Nasdaq exchange, which, under the LSE merger plans, was to have taken a role as a partner.

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See also:

11 Dec 00 | Business
Deutsche Börse 'to float'
28 Nov 00 | Business
Deutsche Börse in OM talks
03 May 00 | Business
Market merger: Full Statement
15 Nov 00 | Business
Nasdaq eyes London Stock Exchange
12 Sep 00 | Business
London cancels market merger
13 Sep 00 | Business
Nasdaq 'emerges' as London partner
15 Sep 00 | Business
Stock exchange head quits
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