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Last Updated: Tuesday, 22 February, 2005, 13:07 GMT
Deutsche Boerse boosts dividend
Bull statue outside Deutsche Boerse headquarters in Frankfurt
Competition to become Europe's leading stock market is fierce
Deutsche Boerse, the German stock exchange that is trying to buy its London rival, has said it will boost its 2004 dividend payment by 27%.

Analysts said that the move is aimed at winning over investors opposed to its bid for the London Stock Exchange.

Critics of the takeover have complained that the money could be better used by returning cash to shareholders.

Deutsche Boerse also said profit in the three months to 31 December was 120.7m euros ($158.8m; 83.3m).

Sales climbed to 364.4m euros, lifting revenue for the year to a record 1.45bn euros.

On board?

Frankfurt-based Deutsche Boerse has offered 1.3bn ($2.48bn; 1.88bn euros) for the London Stock Exchange. Rival pan-European bourse Euronext is also working on a bid.

Chief executive Werner Seifert said he was reluctant to raise his offer, despite the threat from Euronext.

There is a good price out there and we want to stick to it
Deutsche Boerse CEO Werner Seifert

"There is a good price out there and we want to stick to it," he told a news conference on Tuesday. "Besides, it is the only price out there."

Late on Monday, Deutsche Boerse said it would lift its 2004 dividend payment to 70 euro cents (0.48; $0.98) from 55 euro cents a year earlier.

"There is a whiff of a sweetener in there," Anais Faraj, an analyst at Nomura, told the BBC's World Business Report.

"Most of the disgruntled shareholders of Deutsche Boerse are complaining that the money that is being used for the bid could be better placed in their hands, paid out in dividends," Mr Faraj continued.

Deutsche Boerse is "trying to buy them off in a sense", he said.

Extra help

Another step likely to gain investor approval is the company's plan to buy back about 200m euros of its own shares during 2005.

Chief financial officer Mathias Hlubek told Tuesday's news conference that at the end of last year, Deutsche Boerse was sitting on a cash pile of about 1bn euros.

Chief executive Mr Seifert said he was now confident of winning over shareholders opposed to the company's plans for expansion.

"Our strategy combining the takeover of the LSE with further dividend increases and a share buyback...is more attractive than a pure distribution" of cash, Mr Seifert said.

"I am sure we can convince our shareholders."

In Frankfurt, Deutsche Boerse's shares dropped 2.3% to 51.66 euros in early afternoon trading.


BBC NEWS: VIDEO AND AUDIO
Why shareholders are not happy with Deutsche Boerse



SEE ALSO:
'Standoff' on Deutsche's LSE bid
21 Feb 05 |  Business
Euronext trumpets LSE bid savings
09 Feb 05 |  Business
LSE rejects Deutsche Boerse offer
27 Jan 05 |  Business
Boerse board backs LSE bid plan
17 Jan 05 |  Business
Investor threatens German LSE bid
16 Jan 05 |  Business
French suitor holds LSE meeting
07 Jan 05 |  Business


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