Its' been a big week for…

The London Stock Exchange (LSE), which shelved plans to merge with the Deutsche Bourse to concentrate on heading off the hostile takeover bid for the LSE from Swedish technology company OM Group. Chief executive of the LSE Gavin Casey, chairman Don Cruickshank and three non-executive directors including Michael Marks, the chairman of Merrill Lynch who is widely seen as the architect of the planned merger known as iX, are all up for re-election to the board. One of the largest shareholders in the LSE, UBS Warburg has urged the body to consider deals with its counterparts in Paris, Amsterdam and Brussels – preferring a European partner to one from the US, where Nasdaq has been suggested as a potential bidder.

  • Kingfisher. The company announced plans to demerge its general retail businesses Woolworths and Superdrug to the surprise of the City. The announcement followed a sharp 20 per cent drop in first half profits, which were affected by investment into e-commerce services and high street discount battles. The demerger will happen by the second quarter of next year, leaving the new Kingfisher Group focusing on electrical chain Comet and DIY chain B&Q. The company will continue with plans for an aggressive expansion of the general merchandising business, including 90 Big W stores and 400 Woolworths General Stores, which are modelled on US drug stores.
  • Nomura, which withdrew its bid to buy the beleagured Dome because of uncertainty over asset ownership and a lack of financial information. The Japanese bank had not been allowed to the see the report drawn up by PricewaterhouseCoopers into the financial viability of the attraction. Speculation that the bank had withdrawn merely to be able to drive a harder bargain, was quashed by Nomura which said that its decision was final. Three potential buyers who lost out to Nomura's £105m bid are believed to have approached the Government. Legacy, which wants to turn the Dome into a technology park, is believed to be in discussions with the Department of Environment, Transport and the Regions (see news, page 4).
  • Consolidation in the investment banking market, which continued with the £34.9bn (£24.5bn) takeover of 140-year-old firm JP Morgan by Chase Manhattan. JP Morgan's chairman and chief executive Sandy Warner admitted that the bank was too small to continue competing on Wall Street. The deal brings together the third and fifth largest bank holding companies in the US and the new bank will be called JP Morgan Chase. Huge job cuts are expected in London where Chase and JP Morgan have 8,500 and 3,500 staff respectively, as the banks hope to make savings of $1.5bn (£1.1bn). The deal is the third of its kind this summer, following the acquisitions of PaineWebber by UBS Warburg and Donaldson Lufkin & Jenrette by Credit Suisse First Boston. At the time of going to press, Deutsche Bank was expected to finalise a $1.3bn (£900m) deal to buy small US investment bank Wasserstein Perella. The deal was expected to include both the high yield debt and small equity sales businesses but not the private equity division.
  • EMI and Time Warner. Their proposed £20bn (£14.2bn) merger hit problems as the European Commission threatened to block the tie-up unless large concessions are made. It is expected that the EC will insist that EMI must sell off some of its record labels or copyrights to clear the deal. EMI executives are meeting Mario Monti, the European Commissioner who is understood to be close to clearing the AOL-Time Warner merger, again in return for concessions. One of the key concessions is that the companies would have to make their software for downloading music from the internet available to rivals.
  • SmithKline Beecham and Glaxo Wellcome. The long-awaited merger between drug giants SmithKline Beecham and Glaxo Wellcome was put on hold for the second time following investigation by US regulators. Originally GlaxoSmithKline was to have started trading as one company next Monday (25 September), but the US authorities are examining the two companies' alleged domination of the US smoking-cessation market. While the number one over-the-counter anti-smoking aid is owned by SmithKline, its proposed spouse Glaxo owns the only prescription drug to help kick the habit.