Newspaper article The Evening Standard (London, England)

More Miners Than Ever? Well Stone Me; Alliance Could Try Patience

Newspaper article The Evening Standard (London, England)

More Miners Than Ever? Well Stone Me; Alliance Could Try Patience

Article excerpt

Byline: Anthony Hilton CITY COMMENT

THE immediate reaction to the news that the London Stock Exchange plans to merge with its opposite number in Canada is to ask why. In an era of globalisation, when by common consent the engine of global growth is moving to Asia and South America, is it not a leap in the wrong direction? Well perhaps it is but then you can only merge with someone who wants to merge with you. The exchanges of Hong Kong, Shanghai or Mumbai would certainly appear to be more exciting and relevant partners, but perhaps they feel the London Exchange has little to offer them. With the tide of history flowing their way they have no need to do a deal.

In the developed world, the obvious partners of the LSE -- Deutsche Borse and Euronext in Europe, or Nasdaq in America -- were so roundly rebuffed when they came courting that they have made other arrangements. London and Toronto may pretend they are natural partners, but the reality is that they are the only two still left at the ball.

Once married the group tells us it will have more mining stocks than any other exchange group in the world, but so what? This may be the best that the PR department can come up with to justify the merger but there is a slight air of desperation about it. It seems more real to see this as a marriage of convenience which will give both more resources to invest in technology which is vital to continued success.

And it will bulk them up a bit so at least they will still be at the table for the next round of consolidation.

IT IS hard not to feel a sense of deja vu as Laxey turns up the heat on the board of Britain's biggest investment company, Alliance Trust.

First come the demands that the board buy back shares to enhance the share price, then come the complaints that the board's policies were destroying value. Finally, we have accusations that the board use poison pills to entrench its position and resist the legitimate pressure of outside holders.

It sounds so like the script Laxey used in 2004 when it sought to win influence and then control of Private Equity Investor, an AIM-listed investment trust that specialised in investing in venture capital funds. …

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