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The London Stock Exchange is set to take over Turquoise, the share trading platform set up by nine big investment banks to challenge the Exchange's dominance in the UK equity market.
Turquoise is now in exclusive talks with the LSE over its future after putting itself up for sale six weeks ago. Up to 17 rival bidders, which included Deutsche Börse and NYSE Euronext, have dropped out.
Sources close to the talks suggested that new LSE chief executive Xavier Rolet is not looking at an outright purchase of Turquoise but at some kind of deal which would leave the original investment-bank shareholders involved in part-owning but not running it.
The banks include BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Merrill Lynch, Morgan Stanley, Société Générale and UBS.
Turquoise has failed to achieve critical mass, handling about 5% of trades in big London shares against the LSE's more than 65%. Another alternative trading platform, Chi-X, has captured a 20% market share.
Two weeks ago, Rolet signed a deal to buy an Indian technology company specialising in trading systems. Turquoise does not have its own trading system but its pan-European share trading platform is up and running.
