Deutsche Börse and the US Nasdaq stock exchange are leading a consortium that is preparing to launch a £1bn (&euro1.6bn) plus hostile takeover bid for the London Stock Exchange to rival the £888m bid from the Swedish OM Gruppen. The consortium includes the Milan and Madrid bourses.

Deutsche's chief executive, Dr Werner Seifert, wants a cash takeover offer tabled to LSE shareholders over the next week or two. Advisers Goldman Sachs and Deutsche Bank are working together with Nasdaq on the bid, which will top the OM bid by valuing the LSE shares at between £30 and £35. Deutsche Bank, chaired by Rolf Breuer, who also chairs the Frankfurt Börse, is a key supporter of the plans. His bank is understood to have committed the funds to finance a takeover.