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The BBC's Sarah Pennells
"The pace of change is likely to get faster"
 real 28k

Wednesday, 15 March, 2000, 15:22 GMT
Stock exchange votes to go public
There have been big changes in how shares are dealt
Members of the London Stock Exchange voted on Wednesday to demutualise the 200-year-old institution.

The proposal was approved at an extraordinary general meeting.

It could value the exchange of about 300m ($471m).

"Today's vote moves the exchange into a new era, providing a structure that will allow it to compete more effectively in the rapidly developing environment in which stock exchanges now operate," said chairman John Kemp-Welch.

Technological change and greater competition have revolutionised share dealing worldwide.

Now, instead of being owned and run by members, the exchange will be run by a limited company.

It will lead to windfalls of 1m for the 298 brokers and other institutions that currently own the exchange, each of which will get 100,000 shares.

Flotation possible

LSE shareholders will be allowed to trade the shares on a "matched bargain" basis through brokerage Cazenove & Co, but none will be allowed to own more than 4.9%.

Dealing in the shares is expected to start in late April or early May.

Demutualisation also raises the question of a flotation. The exchange said further decisions would depend on the views of its new shareholders.

Chief executive Gavin Casey
Gavin Casey: Keen to maintain influence
The change will also make it easier for the LSE to take part in an expected reshaping of Europe's bourses.

A round of mergers is expected to consolidate the large number of national exchanges into a smaller group of main players.

"With technology, the actual location isn't quite what it used to be because very few exchanges now have floors, it's mainly done by electronic trading and execution," said Mr Casey.

"But obviously as the largest market in Europe we are very keen to maintain the influence of the London market and come up with a very efficient solution."

Merger talks

On Wednesday Belgium said that talks to integrate the Brussels stock exchange with its counterparts in Paris and Amsterdam were very advanced.

Belgian Finance Minister Didier Reynders said the merger project was only one of several possibilities, including alliances with other European stock markets.

A decision on the future of the Brussels stock market, which has been in a bad slump, would be made in the "coming days, coming weeks".

Paris, Brussels and Amsterdam are part of an eight-bourse alliance set up in 1998, led by the London Stock Exchange and the Deutsche Boerse and including Milan, Madrid, and Zurich.

A merger would be the first cross-border stock exchange consolidation in Europe.

Paris Bourse, continental Europe's biggest stock market, also confirmed it was in co-operation talks.

Like London, the German stock exchange is also planning to demutualise and convert to a private company.

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02 Feb 00 | Business
Stock Exchange to sell own shares
06 Dec 99 | Business
German exchange to demutualise
30 Oct 99 | Business Basics
London Stock Exchange
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