A group of 11 London Stock Exchange shareholders said they would vote against the LSE's merger with the Deutsche Boerse in its present form, casting further doubts on the troubled link-up.
The shareholders said they would also be asking Stockholm Stock Exchange operator OM Gruppen for talks about the Swedish company's hostile bid for the London bourse.
"We have lost faith in the present management of the LSE," said Mr Brian Winterflood, head of Winterflood Securities, a market maker and LSE shareholder.
His comments follow news that Euronext, the planned merger of bourses in Paris, Amsterdam and Brussels, is holding talks with investment banks about a possible bid for the LSE.
Other names, like Reuters' wholly-owned Instinet agency broker, have also been mentioned as possible bidders for the beleaguered London exchange. Reuters declined to comment.
LSE shares, traded on a matched bargain basis by brokerage Cazenove, rose to a new high of £31.50 sterling yesterday amid speculation that more bidders were waiting in the wings.
Mr Winterflood said the current merger plan, which gives the LSE and Boerse equal shares in iX, would no longer wash with shareholders because it sells London short.
"Everybody at the meeting now thinks the 50:50 split is no longer acceptable," Mr Winterflood said. "London does not get a fair deal and everybody would be against it.
"We are not happy. We want to speak to OM to see if they would like to talk to us before their offer document comes out," Mr Winterflood added.
The LSE was forced to delay indefinitely its planned September 14th shareholder vote on whether to merge with Frankfurt.
The vote, which needed a 75 per cent majority for the merger to pass, looked a close call even before the OM bid was unveiled.
OM has 28 days to post its official offer document from when it publicly announced its hostile bid proposal a week ago.
The group of shareholders and users which met yesterday had asked the LSE to address 28 points of concern, but have yet to get a reply from the exchange, Mr Winterflood said.
The LSE declined to comment on the iX structure issue, but said a reply to the shareholder group's 28 bullet points would be sent shortly.
Industry sources confirmed weekend newspaper reports that Euronext was considering a bid for LSE, but Euronext itself remained tight-lipped, saying British law barred it from comment until it made a firm offer.
Instinet declined to comment specifically on whether or not it was considering a bid for the LSE. The OM bid, originally worth about £800 million, had risen to just over £900 million by Friday due to gains in OM shares.
Once OM has posted its official offer document, there will be a 60-day period for acceptances when LSE shareholders can signal their agreement to Stockholm's cash and paper bid.
If Euronext, which is officially born on September 22nd, or others make a bid, a new takeover timetable for posting offer documents and acceptances would be triggered.
The iX merger agreement between London and Frankfurt becomes void at the end of the year, and until then, the Boerse could only make an agreed fresh offer for the LSE, whether on its own or in conjunction with other bourses like Milan and Madrid.
