Takes 60 Percent Stake in Turquoise

The London Stock Exchange said on Monday that it had agreed to take a 60 percent stake in the rival trading platform Turquoise, and that it planned to create a pan-European trading venture by merging it with one of its own units.

The new venture, which will retain the Turquoise name, will include the London exchange’s “dark pools” trading platform Baikal Global. Dark pools are trading platforms where banks, hedge funds and institutional investors can trade large blocks of shares in secret.

Existing shareholders in Turquoise will own 40 percent of the new company.

The London exchange said it had agreed to finance the venture for the first two years, and expected to incur additional costs of up to £20 million($32.3 million) in the current year, reflecting restructuring and integration.

The exchange added that it intended to bring in other investors by selling up to a further 9 percent of the business.

The exchange said in October it was in exclusive talks with Turquoise, which was started last year by a group of nine investment banks frustrated by the level of fees at the exchange. While not profitable, it gained about a 7 percent market share.