After OM Gruppen AB formally launched a 808 million pound ($1.18 billion or 1.32 billion euro) bid Tuesday for the LSE, officials at the Frankfurt exchange said they had no immediate plans to change their own deal to merge with the London market. But the Germans are moving quickly to shore up support for a possible counterattack. The heads of the Frankfurt, London, Milan and Madrid exchanges already are meeting Friday to discuss possible moves, including a joint bid, people close to the exchanges say. The strategy session, which follows similar meetings Wednesday between heads of the LSE and Nasdaq with Deutsche Boerse supervisory board members, comes after Deutsche Boerse Chairman Rolf Breuer said Wednesday that he would prefer a bid, if necessary, that included other partners.

Although a cash offer for a takeover instead of a merger has the support of Deutsche Boerse shareholders, "I personally would not be in favour of a solely German, Teutonic-style counterattack," said Mr Breuer, who is chief executive of Deutsche Bank AG, the Deutsche Boerse's biggest shareholder.

"The counterbid should be a joint effort of everyone interested in iX. That might be our friends in Milan or Madrid. That might be other partners, too."Should the exchanges go forward with a joint bid, the move would step up the consolidation of Europe's financial markets even more quickly than the Deutsche Boerse's current proposal to create a combined market with London called iX. The plan, which calls for bringing Madrid and Milan on board once iX is up and running, is the most ambitious plan in Europe to date to meet investors' demands for a single market after the introduction of the euro. But privately, some exchange officials say it could be years before additional partners are able to join.

"The Swedish bid shows that the final picture of the european financial landscape hasn't taken form yet. It will take time, and we're likely to see a lot of events change things during the process," said Bolsa de Madrid chairman Antonio Zoido, who flew to Frankfurt on Wednesday for the inauguration of the Deutsche Boerse's new offices. "But all of this is taking us in the right direction."

The Nasdaq stock market, which plans to forge an alliance with iX once the merger is completed, also is likely to be more supportive of a joint counterbid with other european partners. Although Nasdaq hasn't committed itself to joining a rescue bid, "a collaborative effort makes sense," said Frank Zarb, chairman and chief executive of the National Association of Securities Dealers, which operates Nasdaq. "Nasdaq will be in Europe, and we hope to be in Europe with multiple partners."

In his call for more partners to join a counterbid, Mr. Breuer suggested Wednesday that even OM could join an offer. OM, however, swiftly rejected the idea."It would be foolish to exclude anything, but iX is a weak proposal. We would not support it," said Per E. Larsson, OM chief executive, adding that the 50-50 merger undervalues the LSE because it has much more liquidity than Frankfurt. "We don't understand why [London] agreed to it.Still, Mr. Zoido, as well as Italian and German exchange officials, cautioned that a joint move was just one option, and one that none of the partners had seriously discussed yet."We won't consider the possibility of joining a bid until there's a proposal on the table," he said. Both the Milan and Madrid stock exchanges already have signaled their intent in joining iX under the current plan and signed letters of intent in May to begin formal negotiations once the merger was completed.

And even if the exchanges follow through with a joint counterbid, it could take weeks, even months to put such an offer together, exchange officials warned. Even while they are mapping out options, Deutsche Boerse officials said they would first gauge the reaction in London - both from the LSE and from its shareholders -- to the OM bid.

-- The Wall Street Journal