New EU rules cast doubt over LSE's takeover plans

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Xavier Rolet, chief executive of the London Stock Exchange (LSE: LSE.L - news) , has cast doubt over the group’s future expansion plans by admitting regulatory changes introduced “new uncertainty” over the £480m buy-out of European clearing house LCH Clearnet.

A thwarted takeover would be a blow for Europe’s oldest equity exchange, which depends on new ventures to drive growth as the global downturn hits traditional capital markets hard.

Mr Rolet refused to say whether the acquisition would complete this year as expected. He said: “The regulation brings new uncertainty. We are in conversations with LCH and the authorities and we’ll have to see what they decide. I can’t speculate on the outcome or the timeline.”

He said the group remained extremely committed to the “strategically compelling” deal, which was agreed on both sites in April and would clear the way for the exchange to grow its market for financial products like derivatives.

The terms of the acquisition were questioned by analysts in September, after it emerged LCH would need £260m extra capital if proposed European Commission regulations go through.

Mr Rolet’s caution came as he reported an 8pc fall in first-half pre-tax profits to £165.4. The performance was bolstered by steady growth in the exchange’s information, trade and technology services, which helped compensate for a 19pc drop in revenues in the capital markets business.