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Deutsche Boerse cultivates local ties after LSE deal setback

* Exchange operator seeks to broaden appeal

* Plans follow failure of LSE merger

* Share ownership and IPOs lag in Germany

* Also sponsors local soccer team Eintracht

FRANKFURT, July 19 (Reuters) - Deutsche Boerse is planning to spruce up the Frankfurt stock exchange, a familiar backdrop for TV broadcasts on the German economy, as part of a push to try to attract more retail investors.

Deutsche Boerse is seeking to broaden its appeal and burnish its image following the collapse of a proposed merger with London Stock Exchange.

It is still dealing with the fallout from that deal.

Public prosecutors on Tuesday asked Deutsche Boerse to pay fines of 10.5 million euros ($12.1 million) for failing to notify the public in a timely way about the LSE merger talks and for the design of its executive share-buying scheme. Deutsche Boerse said the allegations are "unfounded in all respects."

Potential refurbishments under discussion by the German exchange operator are an enhanced viewing gallery for visitors and a modernised area to showcase new companies making their debut on the market via initial public offerings, three people with knowledge of the situation said.

The changes could bring a little of the New York Stock Exchange-style razzmatazz to Frankfurt which is seeking to rival London as a financial centre after Brexit.

The plans also foresee the creation of a venue for events in vacant parts of the building such as the one formerly used for bond trading.

The exchange's 19th century building on Boersenplatz in downtown Frankfurt is often used by TV crews when reporting on German financial news even though actual trading at the exchange, which has roots dating back to 1585, is now mostly done electronically.

Deutsche Boerse rents the trading floor areas in the building, which is owned by the Frankfurt am Main Chamber of Commerce and Industry.

The company hopes that investing in this landmark will help to spark greater interest among the German public in share trading, startups and IPOs, two of the people said.

Later this month, board members will debate details and costs of the investment, one of the people said.

Share ownership in Germany was at 14 percent of the population in 2016, according to data from financial industry body Deutsches Aktieninstitut. That compares with 52 percent in the United States, according to a Gallup poll.

IPO issuance in Germany also lags other major economies. Despite buoyant stock markets, IPOs in Germany so far this year total $1.5 billion, compared with $21 billion in the United States, $20 billion in China and $3.2 billion in Britain, according to Thomson Reuters data.

LOCAL PRIDE

Following the collapse of the LSE deal, Chief Executive Carsten Kengeter has said that major mergers are off the table, with the focus instead on partnerships, small acquisitions and investment.

"It's become clear to us, it's become clear to me: Investment in the Frankfurt financial centre is well worth the money," Kengeter told employees gathered at a town hall meeting at its glass suburban headquarters, The Cube, last month.

Deutsche Boerse has also agreed a 6 million euro three-year sponsorship deal with Frankfurt's home soccer team, Eintracht.

Since July 1, Eintracht player jerseys bear the Deutsche Boerse's blue squiggle logo and its name on the left sleeve.

Eintracht already have links with the city's dominant financial services industry, playing their home matches in the Commerzbank-Arena.

The team has a patchy record in the Bundesliga and their last major trophy was when they won the German Cup back in 1988. This year it reached the cup final in Berlin but lost to Borussia Dortmund.

"Too bad," Kengeter said after that game.

"We are already looking forward to when the guys start up again after the summer break." ($1 = 0.8672 euros) (Reporting by Tom Sims; Editing by Jane Merriman and Keith Weir)