Deutsche Boerse stock hit a record high yesterday as investors bet the German exchange might abandon its bid for the London Stock Exchange (LSE) as more shareholders oppose the plan.
Boerse shares peaked at €57.01 before closing up 3.7 per cent at €55.80 amid market talk that a collapse of the roughly €2 billion offer for the LSE would boost the odds of a share buyback by cash-rich Boerse.
LSE shares sank 3.6 per cent to 535p - only 5p above Boerse's indicative 530p offer which the LSE has rejected and well below the 600p record hit in January as speculation of a bidding war for the LSE with Euronext flared.
Euronext, whose shares gained 4 per cent, is also hoping to buy the LSE.
Speculation that Boerse's effort to buy the LSE would fail got a boost on Thursday when mutual fund giant Fidelity said it was against the bid, joining hedge funds Atticus and TCI.
Fidelity owns 4.5 per cent of Deutsche Boerse, while Atticus holds more than 5 per cent and TCI has about 7 per cent.
The hedge funds are expected to seek a vote of no confidence in Boerse's supervisory board at the May annual meeting.
"If Deutsche Boerse is prevented from making a bid, it clears the way for Euronext and I would not be surprised if they offered less [ than 530p]," according to Mr Justin Bates of Numis Securities.
He has a target price of 555p on the stock, saying it still represents a premium the LSE could not get by remaining independent.
WestLB analyst Mr Johannes Thormann raised his target price on Boerse stock to €58 from €56, saying Boerse remained a profitable company that would do well on its own.
He upgraded LSE stock to "neutral" from "sell", saying it was still highly likely that the LSE would be taken over.
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