London Stock Exchange to acquire rival Turquoise: report

The London Stock Exchange (LSE) is reportedly in talks to acquire the loss making rival Turquoise- the alternative share trading platform to the London bourse, launched a year ago by a consortium of the world's leading investment banks.

Under the deal, which is likely to be announced today, the LSE would take a 60-per cent stake for an initial investment of approximately £20 million, while the investment banks that founded Turquoise will hold a 40 per cent stake in the new business, The Sunday Telegraph reported yesterday.

The LSE will retain and extend the Turquoise brand and will be backed by the consortium of investment banks owning it, which were not willing to fund the loss-making bourse since their own balance sheets had taken a beating during the global financial crisis.

The paper, citing a person with knowledge of the negotiations said the LSE would roll its Baikal business - the pan-European "dark pool" trading platform that it launched earlier this year - into Turquoise.

The so-called dark pool trading allows major investors to match buy and sell orders for parcels of shares without first displaying bid and offer asking prices.

Turquoise, which was set up in 2006 and officially launched in August last year by a consortium of nine investment banks comprising of BNP Paribas, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, Merrill Lynch, Morgan Stanley, Société Générale, and UBS, to provide dealing services at a 50 per cent discount in a bid to rival the LSE's high trading fees.