London Stock Exchange Group shares touched a two-month high Friday after a report in Britain's Daily Telegraph suggested the firm was in early merger talks with the Singapore Stock Exchange.
The paper said Singapore Exchange Ltd (SGX) CEO Magnus Bocker and LSE group head Xavier Rolet have had "informal" conversations about a potential $10bn tie-up that would create one of the top three exchanges in the world if it were to clear the myriad regulatory hurdles that cross-border bourse mergers have faced in the past.
The Singapore group, however, issued a clarifying statement on the report Friday which said: "SGX has not engaged in talks with the LSE on a potential merger. However, we are open to collaborations and partnerships which may benefit our shareholders and the company."
Both the LSE and the SGX have been pursing closer business ties of late, announcing a programme earlier this month that would allow investors to trade active securities on each group's respective markets from any jurisdiction.
The new revenue streams will be critical to the LSE Group as it continues to lose market share in and around Europe. Capital markets income fell 15 percent in the company's last quarter, it said Wednesday, but three-month revenues rose 10 percent in total to £209.5m thanks in part to a newly acquired FTSE index business.
The LSE Group dumped its $3.4bn takeover of Canada's TMX Group last year in the face of stiff resistance from that country's competition authorities and the financial and lobbying weight of the Maple Group, a collection of the country's biggest banks and financial firms. Maple Group cleared the final regulatory requirements for the TMX takeover last week after a year-long review of the $3.8bn tie-up.
The SGX has also faced difficulties in its aim to branch beyond its regional market dominance. Last year it gave up pursuit of Australia's main bourse operator, ASX Limited, after that country's Treasurer, Wayne Swann, said the deal wasn't in the national interest.
European authorities have also show reluctance to approve cross-border deals in the exchange sector after nixing a $7.4bn plan to merge the Deutsche Bourse with NYSE Euronext.
LSE Group shares are trading around .8 percent higher at 1,032 pence each after hitting a two-month high of 1,046 pence earlier in the session. Sources in the Daily Telegraph say any potential takeover attempt by the SGX would need to be priced at around 1,510 pence.