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Michael March – Director, Corporate Communications
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LCH.Clearnet Restructures to Deliver Low-Tariff Strategy

London, 15 June 2007

LCH.Clearnet Group, the leading European central counterparty, today announced that it had secured unanimous shareholder approval for the restructuring of the company, first announced on 12 March 2007. The resolutions to effect the restructuring were approved by all votes cast at the company’s Extraordinary General Meeting held today. Pursuant to the restructuring, LCH.Clearnet will buy back 87.6% of its ordinary shares held by Euronext, its largest exchange shareholder. As a result, LCH.Clearnet’s users will hold almost three-quarters of LCH.Clearnet’s shares. In connection with the restructuring, LCH.Clearnet has committed to tariff reductions totalling 30% of net revenue by 2009.

Chris Tupker, LCH.Clearnet’s chairman, said, “We are delighted by the unanimous backing shown by our shareholders. The new arrangements enable us to prioritise the interests of our users, while continuing to recognise the interests of all shareholders. Going forward, our business model stresses aggressive reductions in tariffs whilst retaining our commitment to safe clearing services across the widest possible range of contracts and asset classes.”

Notes for Editors

  1. LCH.Clearnet was created by a merger between The London Clearing House (“LCH”) and Clearnet in 2003. Since its creation, LCH.Clearnet has been owned 45.1% by users and 45.1% by exchanges, with the remaining 9.8% being held by Euroclear, the settlement company. The largest exchange shareholder was Euronext, which owned 41.5% of the company, of which 24.9% were in ordinary shares and 16.6% were in Redeemable Cumulative Preference Shares (“RCPS”).

  2. At today’s Extraordinary General Meeting and Ordinary Shareholder Class Meeting, shareholders approved the early redemption of the RCPS, valued at €199m, and the buyback of 26.2 million of Euronext’s ordinary shares. The buyback will be executed at a price of €10 per ordinary share, the value at which the shares were issued at the time of 2003 merger. This will amount to a total aggregate consideration of €461 million.

  3. Resolutions to implement the changes to the Articles of LCH.Clearnet Group Limited necessary to effect the restructuring require support by 75% of shareholder votes cast. At the Extraordinary General Meeting and Ordinary Shareholder Class Meeting today, all votes cast supported these resolutions.

  4. In 2006, LCH.Clearnet delivered record operating profits of €177.6m. In addition, LCH.Clearnet Group has recently completed a €200m, 10-year Tier 1 issue. The RCPS redemption and ordinary share buy-back will be paid for partly out of retained earnings and partly by the Tier 1 issue.

  5. Following the completion of the buyback, Euronext will own 5% of the issued share capital of LCH.Clearnet. Two other exchanges, LME and ICE, will hold respectively 4.4% and 1.5%,  Euroclear will own 15.8% and the remaining 73.3% will be owned by users.

  6. In connection with the approved restructuring, changes to LCH.Clearnet’s business plan will be implemented. In particular, explicit targets for tariff reductions as a percentage of net revenue are being introduced. These are: 15% in 2007, a further 10% in 2008 and a further 5% from 2009, making 30% in total, in addition to reductions announced during 2006 but coming into force on 1 January 2007.

  7. To recognise the interests of non-user shareholders, LCH.Clearnet intends to proceed with its announced plan to repurchase up to 2% of its ordinary shares each year from 2009. Also from 2009, subject to adequate regulatory capital being available, 50% of the previous year’s retained earnings will be paid as a dividend to shareholders.

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LCH.Clearnet clears a diverse range of asset classes worldwide.

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