The all-cash offer of 115p a share is at a 26 per cent premium to the company’s share price two months ago, before Promethean first announced that it had bought a 3.7 per cent stake in the bank.
However, shares in LSB, which specialises in providing loans to customers with poor credit histories, have crept up over the past few weeks on the back of bid rumours, and were already trading at 113.5p by the time yesterday’s announcement was made.Rumours of a counter-bid from the US private-equity group Steel Partners, at as high as 135p a share, were already starting to circulate yesterday morning, pushing the stock to 118.5p. Promethean, the investment vehicle launched by the ITV chairman Sir Peter Burt last summer, moved a step closer to making its first major acquisition yesterday, laying down a £164m unofficial bid for London Scottish Bank. Shares in Euronext closed down 1.3 per cent at €68.30.. Shares in Deutsche B? fell more than 3 per cent in early trading in reaction to the chief executive’s comments, but recovered to close up 0.8 per cent at €114.04 (£79.30). However, it has knocked back all approaches for being too low.Euronext has a shareholder meeting next month, where it is expected to come under renewed pressure to find a resolution to the situation.Shares in the LSE fell 0.8 per cent to 1,028p yesterday, giving the company a market value of about £2.6bn. Meanwhile, it emerged that Euronext has been in merger talks with the LSE in recent weeks, and would now prefer a cross-Channel tie-up over a deal with its German rival.In an interview with the German newspaper Handelsblatt yesterday, Reto Francioni, Deutsche B?’s chief executive, said he was ready for a “swift merger” with the Paris-based operator.However, Euronext is believed to be unenthusiastic about the proposal, as Deutsche B? has indicated it would want to have the headquarters of the combined operation in Frankfurt, and would also want to hold on to the Luxembourg-based exchange, Clearstream.Euronext believes any merger should be conducted on a 50-50 basis, with Clearstream sold or floated off separately.The Paris-based company is now believed to be far more attracted to a nil-premium merger with the LSE, creating a company with a combined market value of about £6bn.The exchanges have come under pressure in recent months to consolidate as a means of boosting trading volumes and reducing costs.Since Deutsche B? made its bid for the LSE 16 months ago, the UK business has received approaches from Macquarie, the Australian investment bank, and Nasdaq, the US exchange, as well as Euronext. Before rumours of Deutsche B?’s interest in the exchange emerged in December 2004, the stock was trading below 400p.
Deutsche B?, which pulled out of the race for the LSE last year after pressure from its shareholders, said yesterday that it was now impatient to merge with its European rival Euronext.

Fidelity, once the LSE’s largest shareholder, owning more than 10 per cent of the exchange, has been gradually selling down its position for the past year, during which time the share price has gone from around 450p to more than 1,000p, touching a high of 1,219p last month. The UK’s largest fund manager, Fidelity Investments, has sold the last part of its stake in the London Stock Exchange, crystallising a tidy profit for its investors after the bidding war for the company over the past 16 months. In New York, oil prices jumped $1.35 to $68.74, below the historic peak of $70.85 touched on 30 August.. The cost of Brent crude breached the previous all-time high of $68.89, the peak reached on 30 August when Hurricane Katrina battered oil facilities in the Gulf of Mexico. Oil prices surged to new highs yesterday after fears of a military conflict intensified between the US and the major oil exporter, Iran.

Crude oil prices hit a record high of $68.93 per barrel in London as tension rose over Iran’s nuclear programme and amid continuing disruptions to oil supplies in Nigeria, Africa’s biggest exporter of oil. The news on both treatments has given a welcome boost to Phytopharm, which suffered a setback in November when its Alzheimer’s drug failed to show benefits in tests Phytopharm shares closed up 4p at 43p.. The consumer giant pumps €1bn (£694m) into research and development each year, the bulk of which is spent on developing “look good, feel good” products such as antioxidants in tea and appetite suppressants.In January, Phytopharm struck a deal to license its skin treatment for dogs to Schering-Plough’s animal health unit, with expected annual sales of up to $40m (£23m). In addition Phytopharm will receive an undisclosed royalty on sales of all products containing the extract.Richard Dixey, the chief executive of Phytopharm, said: “Our partnership with Unilever provides a fully funded programme and we look forward to generating royalty income from our partner’s globally recognised brands.”After the clinical trials, expected to take a year, Unilever will work on the branding and marketing of the product. At the same time, Unilever is running a separate agronomy programme to determine whether the cactus, which takes 50 years to reach maturity, can be grown commercially.As part of the 2004 co-operation agreement between the two companies, Unilever committed to an initial payment of £6.5m for the first stage and has now committed a further £3.5m out of a total of up to £21m in payments to Phytopharm. Phytopharm and Unilever are embarking on clinical trials in the second stage of the project to make sure it works on humans and is safe to use. The extract is derived from the African Hoodia cactus, which the San bushmen of the Kalahari desert have been eating for thousands of years to stave off hunger during long hunting trips.