Shares in the London Stock Exchange (LSE) slumped yesterday after Deutsche Berse abandoned its £1.35bn takeover proposal and fears grew that a rival suitor may walk away.
The decision by the Berse to bow to a shareholder rebellion gives Paris exchange Euronext a clear run to launch a formal bid for the LSE.
But the City questioned whether Euronext would be able to generate enough support for an offer, particularly as it shares many investors with its German rival.
The Berse said its decision to withdraw its preliminary offer of 530p a share followed talks with its shareholders over the past month. It also cited the opposition of the LSE board, which considered the offer too low.
It now plans to return a "significant" amount of cash to shareholders, but said that its bid could be resurrected if Euronext made a formal move.
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