EUROPE – European pension funds could potentially become involved in a takeover battle for the London Stock Exchange if Australia’s Macquarie decides to make a bid for the exchange.
Several European schemes are investors in Macquarie funds, which the bank has indicated could be involved in a potential bid.
The Macquarie Group said that it and “its specialist listed and unlisted funds” – which include those backed by schemes such as ABP and Suez-Tractebel – were considering a possible formal approach for the London Stock Exchange Plc.
It said its deliberations were “at the most preliminary of stages” and that there was no guarantee of a formal approach of offer for the exchange.
“If any bid were made, it would be as part of a consortium and if any such offer is made it is likely to be solely in cash.”
Macquarie runs eight listed and six unlisted infrastructure funds. The unlisted Macquarie European Infrastructure Fund, which has European schemes among its backers, is one of only two of the unlisted funds that would be able to invest in an asset such as the LSE. The other unlisted funds invest specifically in airports, Korea, Canada and South Africa.
Of the eight listed funds, four would appear to be ineligible for the LSE investment as they invest in assets such as airports and energy utilities. A Macquarie spokeswoman declined to comment.
An ABP spokesman also declined to comment.
According to the bank’s web site, the MEIF fund “invests in assets that provide essential services to the community, have a strategic competitive advantage and provide sustainable and predictable cashflows”.
It is “targeted at pension funds and other institutional investors seeking long-term stable returns matching their long-dated liability profiles”.
The exchange said had received no formal approach from Macquarie and that it was confident in its growth prospects as an independent group. The LSE’s gross annual turnover has risen steadily from £193.5m in 2001 to £259.7m this year.