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London Stock Exchange holds the key

The focus of consolidation of European equity exchanges lies in the triangle of Deutsche Börse, Euronext and the London Stock Exchange. To the impartial, dispassionate observer, there might seem little problem with any tie-up between London and a continental European player. But to those who work and live in the markets, exchanges, like national airlines, are a mark of a country's honour and something to be fought for.

"There is a lot of hubris about all this, there's a lot of national prestige," says Richard Kilsby of securities market consultancy Efficient Frontiers, who while at the LSE helped to establish its Sets trading system. "There is still something about being the biggest exchange in Europe. It doesn't matter who is the most profitable."

But the EU wants to free up the ability to trade and the LSE, being fully listed, remains a potential takeover target for any acquirer willing and able to make a compelling offer to its shareholders.

Although Werner Seifert and Deutsche Börse have already tried and failed once to get their hands on the LSE, Euronext is moving up on the rails and indeed is seen by some as the more likely of the two to win London over.

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