The London Stock Exchange announced yesterday that it was in exclusive talks to buy the Turquoise share-trading platform, after details of the talks had been leaked to the press.
By Chris Farnell
A formal statement from the LSE said: “London Stock Exchange Group plc announces that it has entered into exclusive discussions with Turquoise Trading Limited, which may lead to a transaction. A further announcement will be made in due course.”
Turquoise was founded just over a year ago by a group of nine banks. Despite an estimated 30 million pound investment in the platform it has yet to turn a profit or achieve a significant market share. However, it is credited with developing a cheaper trading platform, and forcing the LSE to lower its own fees.
LSE experienced over 130 job cuts last week after reviewing costs.
DARK POOLS
The banks behind the project were Credit Suisse, Morgan Stanley, Goldman Sachs, Citi, UBS, Société Générale, BNP Paribas and Deutsche Bank.
By buying the platform LSE would be able to knock out one of its competitors, as well as involving these banks in its ‘dark pool’ called Baikal. A dark pool is a crossing network that provides liquidity that is not displayed in the order books, allowing large movements of shares without making an impact on the open market. Turquoise provides a competing order book to the LSE’s, while also providing its own ‘dark pool’ in TQ Lens.