€94m annual IT savings detailed in LSE takeover bid

European stock exchange Euronext has launched a rival bid for London Stock Exchange that it claims will deliver €94m a year savings by moving to a single IT trading platform.

The move follows German exchange Deutsche Börse's £1.3bn bid for the LSE at the end of January, which was rejected.

Euronext has not put a value on its bid for the LSE but claims it will deliver twice the level of cost savings promised by Deutsche Börse.

The exchange operator, which runs the stock exchanges in Amsterdam, Brussels, Lisbon and Paris, said its takeover will generate total annual pre-tax cost and revenue savings of €203m with total restructuring and revenue costs estimated at €184m.

Central to this is the rationalisation of the IT systems, which Euronext claims will deliver €94m a year savings.

In the document detailing a breakdown of the takeover proposals Euronext said €50m a year savings would result from migration to a single cash trading system within 18 months of a takeover, although no decision has yet been taken on whether that would be the LSE's Sets trading platform or Euronext's NSC platform.

Another €32m a year would come from combining all the UK IT services into one data centre with a single network and the use of shared service agreements, with a further €7m a year from consolidating other systems.

Euronext said the consolidation of IT platforms would only be done with user consultation and that the LSE would still be regulated by the UK's Financial Services Authority.

"Euronext is an international company with a multinational board and management. It has a track record of successfully integrating cross-border businesses, migrating IT platforms and delivering revenue accretion," the document said.

The LSE's Sets electronic trading platform could also be under threat if the Deutsche Börse offer succeeds. Analysts last month said the German exchange's IT platform is widely regarded as being superior to the LSE's.