LSE and FTS Russell in the spotlight with rumours for possible takeover — and opposition to fee hikes

There is talk that a 15 billion pound takeover bid is coming for the London Stock Exchange.Bloomberg

There may not be a connection but it sure makes for interesting reading.

We are referring to the news, speculative at this stage but a prominent item in the British press, that a 15 billion pound takeover bid is coming for the London Stock Exchange. The talk is that it could come from one of two potential candidates, the CME Group (which owns the Chicago Mercantile Exchange) or the International Exchange Group (which owns the New York Stock Exchange.) The talk has largely come from The Children’s Investment Fund Management, an activist, which according to one report “laid siege” to LSE’s board in 2017.

There is a Canadian angle: a few years back the LSE and the TMX Group were set to merge, a plan that came unstuck when Canada’s largest financial institutions stepped in with a recapitalization plan.

Behind the LSE takeover chat, there is much chatter about the activities of FTSE Russell, a unit of the LSE that is one of the world’s largest providers of debt and equity indexes. That chatter (that has occurred on LinkedIn’s Financial Market Data) concerns the steep price hikes that FTSE Russell has been charging its clients, particularly in Europe. Some are surprised by the fees and wonder whether they are justified.

Last year FTSE Russell also faced push-back when it levied much higher prices for the services and products it provides to its Canadian clients. Over time, some of those hikes – of the order of an eightfold increase in some cases – were wound back.