Deutsche Börse Considering A Cash Offer For The London Stock Exchange

Deutsche Börse AG confirms that it has made a proposal to the Board of the London Stock Exchange plc with a view to making a cash offer for the acquisition of all London Stock Exchange shares. The proposal indicates an offer of 530 pence per London Stock Exchange share. This offer would represent a 52.3 percent premium to the undisturbed closing share price for the London Stock Exchange of 348 pence on 22 October 2004 and a 49.6 percent premium to the average London Stock Exchange share price in the three months prior to that date.

Although the London Stock Exchange has rejected the proposal they have invited Deutsche Börse to hold discussions regarding the possibility of an agreed transaction. Deutsche Börse has accepted the invitation in order to demonstrate to the London Stock Exchange the full benefits of its proposal and its belief that such proposal can be successfully implemented.

Deutsche Börse strongly believes that this proposal is in the best interest of shareholders and other stakeholders including customers. It is Deutsche Börse’s intention to preserve the existing market structures including established market models and existing trading currencies as well as the regulatory frameworks in both markets. Deutsche Börse aims to effect a material reduction in the current level of tariffs for electronic order book trading in the UK. Deutsche Börse intends to honour existing agreements between the London Stock Exchange and the clearing and settlement providers in the UK processing value chain.

There can be no assurance that any offer will be made.