The consideration will comprise an initial instalment of £33.8 million, payable on completion (including a £3.4 million deposit payable immediately), and an unconditional deferred payment of £33.2 million on 31 December 2005. In addition, the terms provide for a potential further payment to the London Stock Exchange of up to £6 million by December 2009, based on the profitability of any redevelopment.
After costs relating to the transaction and discounting proceeds, the London Stock Exchange's expected profit is a minimum of £5 million, based on an estimated book value at the time of completion of £56 million. The net profit is expected to be recognised in the 2004/05 accounts. Proceeds from the transaction will be used for general corporate purposes.
The London Stock Exchange's move to its new headquarters at 10 Paternoster Square is on schedule to complete in June 2004. Of the 220,000 sq ft of total space at the new building, 80,000 sq ft is currently available for sub-letting, 32,000 sq ft of which is already contracted/under offer to sub-tenants. Interest in the remaining available space is encouraging and is expected to increase further following completion of the fit-out work and the London Stock Exchange's occupation of the building.
