The future ownership of the London Stock Exchange is uncertain after Deutsche Boerse announced it was withdrawing plans for a takeover. BBC News looks at what this latest development could mean.
Any overseas deal for the LSE could face EU scrutiny
What did Deutsche Boerse say?
With somewhat surprising timing, making its announcement on a Sunday evening, the Frankfurt-based organisation said it was "withdrawing its proposed pre-conditional cash offer of no less than 530 pence for each ordinary share" for the London Stock Exchange(LSE).
Why has it withdrawn its offer?
It said the move was in reaction to the board of the LSE not recommending the Deutsche Boerse proposal for acceptance.
Any other reasons for the pull out?
Yes, the Deutsche Boerse board has been "holding discussions" with its own shareholders.
There have been rumblings of discontent from a number of institutional shareholders in Deutsche Boerse about the proposed LSE takeover, including from Standard Life Investment, Atticus Capital and TCI Fund Management.
Media reports suggest that as many as 35% of investors in Deutsche Boerse
were opposed to a takeover of the LSE. Some had threatened to force a meeting to overthrow the board if their concerns were not met.
Critics of the takeover also complained that Deutsche Boerse earnings could be better used by returning cash to shareholders.
In February, Deutsche Boerse boosted its 2004 dividend payment by 27%, in what was seen as a move aimed at winning over investors opposed to its proposal for the London Stock Exchange.
Has anyone else opposed the merger?
Some smaller independent share dealers had feared that a Deutsche Boerse takeover of the LSE could create an over-powerful monopoly that could be tempted to raise fees.
What will happen now at the LSE?
Its shares fell by 10% on Monday morning in the wake of the announcement, and its board was reported to be meeting during the day to discuss the way forward.
The envisaged bidding war between Deutsche Boerse and smaller pan-European rival Euronext for the LSE has not transpired.
If the LSE had been hoping to squeeze out a higher price from Deutsche Boerse it has not been successful.
What happens next at Deutsche Boerse?
Despite commentators' claims that the future of Deutsche Boerse chief executive Werner Seifert may now be in question, the German exchange said "the question of a resignation is not being posed".
It also said it reserved the right to come back with another bid for the London exchange if a rival buyer appeared.
Are there any other potential buyers?
Hovering on the sidelines of the LSE-Deutsche Boerse negotiations has been rival Euro-stock exchange Euronext.
Euronext combines the stock exchanges of Paris, Brussels, Amsterdam, Lisbon and also runs the London-based international derivatives market Liffe.
It has been touted as a possible LSE suitor since last December, but has not put forward any offer.
Has Euronext said anything about a possible deal?
In February Euronext said a merger with the LSE would lead to annual savings of around 203m euros (£138m; $259m).
A unitary, single-tier board would be created and a dual stock market listing for the combined exchange would be sought in London and Paris.
Many experts agree that savings would result from a Euronext takeover because it already owns the Liffe derivatives market in London, giving it an existing presence in the UK capital.
A deal with either Euronext or Deutsche Boerse - if it came back into the fray - should, theoretically, make it easier to invest in overseas companies and markets. It would also create the biggest stock market operator in Europe and the second biggest in the world after the New York Stock Exchange.
Is all well at the LSE?
The London exchange has come in for harsh criticism in the past.
A look back at its share price suggests investors are none too impressed with its performance - spikes in its share price have been mainly confined to times of takeover speculation.
The group has also struggled to attract new companies to list: the only big names that made it onto the market last year were Premier Foods and bookmaker William Hill.
It has also had a hard time convincing major global companies to list in London.
Does it matter if the LSE ends up in overseas hands?
There are fears that if the LSE ends up in foreign hands, the UK's financial services sector could go the way of its manufacturing sector.
And as well as getting investor approval, any merger will also have to get regulatory approval.
Europe has only three major exchanges - LSE, Deutsche Boerse and Euronext, and when the Deutsche Boerse merger was initially proposed, the LSE is thought to have feared a drawn-out wrangle with the European Commission.
What happens next?
The ball is very much in the Euronext court. It will have to decide whether to follow up its initial interest in the LSE with a formal proposal.
However it certainly has not lost anything by the Deutsche Boerse withdrawal.
As one London trader said: "This may be good news for Euronext because it means Euronext does not have to get into a price war to try and bid
up to buy LSE, which it wanted from the very start anyway."