Pending shareholder approval, the Deutsche Borse (DB) A.G. will restructure its ownershipeither via a private placement or an initial public offeringlater this year.
In May, shareholders of the DB will vote on whether the organization, which owns 100% of the Frankfurt Stock Exchange and 50% of the German derivatives exchange, should overhaul its ownership business model.
If a majority of shareholders approve a private placement or an IPO, a portion of the capital DB raises via the restructuring will be earmarked to the creation of soon-to-be-launched, niche oriented ECNs. An additional segment of that capital will fund the development of a global integrated clearing company that will provide clearing services for securities traded in both the exchange and over-the-counter markets across Europe.
Currently, DB is 80% owned by a group of large international banks, including Deutsche Bank. A combination of seven regional German exchanges and floor brokers of the Frankfurt exchange own the remaining 20% of the DB, says a company spokesperson.
Eventually, says the spokesperson, the companies want to sell around 50% of the DB to global players, such as Morgan Stanley Dean Witter. Individual investors, he says, would also get a chance to own a minority stake in DB should the firm decide to go public.
While declining to specify the number of shares that would be issued to retail investors in the event of a DB IPO, the spokesperson says that an ownership restructuring may also yield a new name. The company is thinking of renaming itself the EuroBoard, he says.
The DB, the spokesperson explains, expects to use some of its restructuring capital to roll out a group of tightly focused ECNs. That group, he says, may include ECNs created exclusively for trading Bund futures and German blue-chip stocks.
An additional chunk of the capital, says the spokesperson, will be earmarked for a major clearing project the DB is working on. Today, the DBs primary clearing vehicle is Eurexs clearing house. But in the future, says the spokesperson, that entity will be integrated with a yet-to-be-named global integrated clearing firm.
In addition to its equity interests in the Frankfurt exchange and Eurex, the DB also owns Deutsche Borse Systemsits systems integration unitand has a 50% stake in ClearStream, a German back-office services supplier.