LSE Strategic Alliance with Euronext?

LONDON (AFX) - Britain's financial watchdog is to investigate Macquarie Bank
Ltd's hostile 1.5 bln stg bid for the London Stock Exchange, the Observer
newspaper reported without citing sources.
The Financial Services Authority wants to find out whether the Australian
bank fulfils rules that require new owners of financial institutions to be "fit
and proper", and to furnish proof that Macquarie's plans do not involve undue
financial risk, it said.
Last week, Threadneedle Asset Management and Scottish Widows, LSE's biggest
investors, rejected Macquarie's bid, equivalent to 580 pence per share, as too
low.
Separately, the Independent on Sunday reported that Euronext is still aiming
to put in an offer of over 600 pence per share for LSE in an attempt to trump
Macquarie's bid.
This will involve Euronext giving undertakings to cut its holdings in its
clearing business Clearnet from 41 pct to less than 15 pct, said the unsourced
article.
The news came amid speculations that Euronext is in merger discussions with
Deutsche Boerse.
Deutsche Boerse declined comment