A major shareholder in the New York Stock Exchange has proposed a strategic link between the NYSE and the London Stock Exchange, instead of a merger or takeover. He is to meet with John Thain, the NYSE chief executive, within the next week and will pusue the idea then.

The Times (London) reports: “Thomas Caldwell, chief of Caldwell Asset Management and owner of about 2.7 percent of the NYSE’s shares, told The Times last night that a merger or takeover between the LSE and the NYSE could create more problems than it solves. ‘It could be very messy, very costly and very time consuming, and to me the benefits of such a deal are not clear at all,’ he said. Mr Caldwell said that he believed the NYSE, the LSE and other international exchanges should consider striking alliances similar to those undertaken in the airline industry.”

“The One World Alliance is a good example,” he said. Under such an alliance exchanges could move towards creating shared technology such as trading platforms and could use each other’s geographic location to extend trading hours. “For example, clients could trade New York listings through London while New York is closed and the exchanges could split trading fees two-thirds to one-third or something like that.”

Speculation is growing again in the City over the fate of the London Stock Exchange after Dubai took a 1.27 percent share in Euronext, the pan-European exchange.

The move by the Dubai International Financial Centre has set tongues wagging about a possible three-way tie-up between the LSE, Euronext and Dubai. The more imaginative seers are pressing a scenario whereby Euronext cosies up to the New York Stock Exchange in a bid for London.

One thing’s becoming clearer by the day. Whatever befalls Clara Furse’s ancient institution, it’s unlikely to be conventional or straightforward.

How about remaining independent, whatever that takes?

The quoted price of London Stock Exchange shares stood at 1258p ($22.40) on April 20, 2006 at 14.00 hrs GMT.

Shareholders vote for return of capital
Shareholders in the London Stock Exchange have voted almost unanimously for a return of £510 million ($908m).

Using its adviser, Citigroup, the New York Stock Exchange is beginning to sound out major shareholders in the London Stock Exchange.

The move is seen as testing the water as part of its campaign to end LSE independence. Among those contacted were Scottish Widows and fund manager DE Shaw and Co.

Reports suggest that talks have taken place between the LSE’s Clara Furse and John Thain, the NYSE chief. Furse is also said to be slating a meeting with Robert Greifeld of Nasdaq, which has built a fighting fund of $1.1 billion through a loan facility with Bank of America.

The NYSE is hedging its bets by suggesting it may be interested in tie-ups with the Chicago Mercantile Exchange. Its earnings’ report, due this week, may shed more light on its future intentions.