06.20.2012

NYSE Euronext Eyes Rapid London Exchange Expansion

06.20.2012
Terry Flanagan

NYSE Euronext is looking to establish a bigger presence in the U.K. market after securing a first listing to its previously dormant London exchange.

Following on from the failed $7.4 billion super-exchange merger between transatlantic exchange operator NYSE Euronext and its German rival Deutsche Börse in February after European Union competition authorities opposed the deal, NYSE Euronext has been keen to add new revenue streams in Europe.

Eurotunnel, the owner of the rail tunnel linking England and France, which has a market capitalization of €3.5 billion, is to become the first company to list on NYSE Euronext’s regulated London exchange after defecting from the incumbent London Stock Exchange (LSE). Eurotunnel will begin trading on NYSE Euronext’s venue from July 19.

With a previous dual listing on the LSE in London and NYSE Euronext in Paris, Eurotunnel has decided to simplify access for investors by combining both its Paris and London listing on a single platform and order book.

“Our London listing [at the LSE] has not had enough liquidity,” said Jacques Gounon, chairman and chief executive of Groupe Eurotunnel. “Today’s move will allow investors to have easier access to Groupe Eurotunnel shares.”

The coup by NYSE Euronext will see it go head to head against the LSE—Europe’s largest venue for listings—for new and existing listings. In Europe, NYSE Euronext operates markets in Paris, Lisbon, Amsterdam and Brussels as well as the London derivatives market Liffe and SmartPool, a European dark pool.

“This is a significant and exciting new chapter for the two companies and we are delighted to welcome Groupe Eurotunnel as the first company to be admitted to trading on NYSE Euronext’s London trading venue,” said Dominique Cerutti, president and deputy chief executive of NYSE Euronext.

“Groupe Eurotunnel will immediately benefit from our leading position in the European cash markets and gain access to a deep and liquid investor base from the UK, eurozone and global investor community. We believe that we are offering a superior alternative to companies wishing to list here thanks to the strength and visibility of our global brand.”

NYSE Euronext established its London venue in 2010, but uptake had been non-existent until today’s announcement. NYSE Euronext says it is now in talks with new potential issuers and hopes that the venue will become an extension of its pan-European operations.

“NYSE Euronext’s London-based listings venue looks to extend the group’s strong brand to international firms looking to list in London and access its deep pool of institutional investors,” Richard Perrott, an analyst at Berenberg Bank, told Reuters.

The LSE declined to comment on the matter.

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