Deutsche Börse submits bid for Warsaw exchange

Deutsche Börse, the German exchange and clearing group, confirmed on Friday that it had put forward a final bid to buy a majority stake in the Warsaw Stock Exchange, which is being privatised by the Polish government.

Potential buyers have until the end of Friday to place bids. The German group, Europe’s biggest exchange company, was one of four companies shortlisted to take part in the privatisation.

Of the others, London Stock Exchange has decided not to take part while NYSE Euronext and Nasdaq OMX declined to say whether they had bid.

Deutsche Börse said in a statement that it would support Poland’s "goal of strengthening the position of WSE as the pre-eminent financial exchange in central and eastern Europe".

Warsaw is vying with the Wiener Börse, Austria’s exchange, for dominance of central and eastern European exchange markets. This week the Wiener Börse said it planned to set up a holding company that would act as an umbrella organisation for the Vienna, Budapest, Ljubljana and Prague exchanges, all of which are controlled by Wiener Börse.

On a conference call with analysts, Reto Francioni, Deutsche Börse’s chief executive, declined to go into detail about a bid for the Warsaw exchange, saying only that the group would only proceed with a transaction if it made sense for shareholders and customers.

Deutsche Börse runs the Frankfurt stock exchange, Germany’s biggest. It leases its Xetra trading system to the Wiener Börse.

Mr Francioni said on Friday that Deutsche Börse’s overall business had stabilised in the three months to the end of September, after a sharp decline in trading volumes for both equities and derivatives over the past year – attributed to investors’ lack of risk appetite since the financial crisis.

The group faced an "environment which continued to be influenced by market participants’ reluctance to trade", Mr Francioni said when revealing quarterly results.

Bernstein research said: “We’d expect activity to see a seasonal slowdown going into December, before a return to growth in 2010 as trading activity picks up, largely on the back of greater hedge fund activity”.

Net income for the exchange in the first nine months was 35 per cent below levels last year, while revenue was 16 per cent lower.

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