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Deutsche Börse, LSE lower acceptance threshold for merger

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Deutsche Börse, LSE lower acceptance threshold for merger

Deutsche BörseAG and London StockExchange Group Plc have lowered the acceptance threshold forDeutsche Börse shareholders to tender their holdings in the company in connectionwith the firms' planned merger.

The firms agreed to lower to 60% from 75% the minimumacceptance thresholdof the tender offer bynewly incorporated HLDCO123 Plc to acquire all registered no-par-value sharesin the German firm.

The move arose out of a technicality under which index fundsthat represent up to 15% of Deutsche Börse shares would likely have been unableto signal their approval in time to count toward the threshold.

Such funds can tender their shares only after a minimumacceptance threshold — 50% for the DAX, 75% for the STOXX and MSCI indexes — isreached and adjustments are made to the relevant indexes. Institutionalinvestors tend to wait until the final day of a tender offer to tender theirshares, however, leaving insufficient time for the required index adjustments.

The exchange offer will now expire July 26, a two-weekextension from the original deadline. Should the reduced minimum acceptancethreshold be met, a subsequent acceptance period will be open for two weeks toallow any remaining Deutsche Börse shareholders, including index funds, totender their shares.

The expected publication of the results of the acceptanceperiod is July 29. The expected additional acceptance period is slated to beginJuly 30 and conclude Aug. 12. The expected publication of the results of theadditional acceptance period is Aug. 17.

Some 25.7% of Deutsche Börse shares had been tendered as ofJuly 8, The Wall Street Journal wroteJuly 11.