Deutsche Borse may lower shareholder approval threshold to finalize LSE merger


After London Stock Exchange shareholders last week gave their nod of approval to the LSE’s merger with Frankfurt-based Deutsche Borse, this week’s vote by the other side of the transaction might be made a little bit easier.

Deutsche Börse AG has announced that it is evaluating lowering the minimum acceptance threshold for the deal, technically a takeover offer for Deutche Borse by HLDCO123 PLC.

The public exchange offer made by HLDCO123 PLC to the shareholders of Deutsche Börse AG is now subject to a minimum acceptance threshold of 75% of the shares in Deutsche Börse AG. The parties involved currently evaluate a potential lowering of such minimum acceptance threshold with a view to enable index funds to participate in the offer.

Index funds, which represent up to 15% of Deutsche Börse shares, are only technically capable of tendering their Deutsche Börse shares after the minimum acceptance threshold has been reached and once the untendered shares are replaced by the tendered shares in the respective index. For the DAX as the most relevant index, the replacement takes place two trading days after 50% of the Deutsche Börse shares have been tendered. For STOXX and MSCI the thresholds are 75% and above.

As most institutional shareholders only tender their shares on the last day of the initial offer period the respective threshold will not be achieved prior to that day, hence the replacement will take place after the end of the initial offer period. By reducing the acceptance threshold that technical issue could be addressed.

No decision has been made in this regard yet. On Monday, 11 July 2016, the facts then known will be finally evaluated by the parties involved. Only then will a decision by the relevant bodies of the parties involved be made if the acceptance threshold will be lowered or not.

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Deutsche Borse may lower shareholder approval threshold to finalize LSE merger

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