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Last Updated: Monday, 25 September 2006, 07:31 GMT 08:31 UK
Icap emerges as latest LSE suitor
London Stock Exchange building
Stock markets are proving to be attractive investments
A new player has emerged in the lengthy battle to take over the London Stock Exchange after UK brokerage Icap said the two sides had held merger talks.

However, Icap, the world's largest inter-dealer broker and a recent entrant into the FTSE 100 stock index, said the talks had been called off.

A number of firms including Nasdaq and Euronext have been linked to a takeover of the London Stock Exchange (LSE).

The LSE has resisted approaches, saying that it can continue to grow alone.

Share drive

Earlier this year, LSE chief executive Clara Furse said that the company would not do a deal for the sake of doing a deal.

However, analysts and market observers have speculated that stock exchanges will need to merge if they wanted to keep on growing and offer a wide-range of global financial services.

Already the New York Stock Exchange has agreed to merge with European market Euronext, and analysts are expecting further tie-ups in the industry.

The LSE is attractive because of the UK's light-touch regulatory regime that makes it less onerous for companies to list their shares.

Analysts also said that a tie up with Icap, which offers derivatives, fixed income, energy and other money-market broking services, would make sense.

Reports over the weekend suggest that Icap had stepped back from talks because it felt that the LSE's shares were overvalued.

The continuing bid speculation and good earnings figures have seen the LSE's shares more than double in value over the past 12 months.

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