Euronext, the Paris-based exchange, yesterday unveiled tantalising details of its bid for the London Stock Exchange (LSE) which suggest it can afford to pay substantially more for the business than a similar bid from its Frankfurt-based rival.

"Euronext has outlined potential synergies from a LSE deal that are two times those Deutsche Borse expects," said analysts at Dresdner Kleinwort Wasserstein.

"While sceptical on revenue synergies we now estimate that Deutsche Borse should bid no more than 548p versus 641p from Euronext. Post deal, both could look cheap," they said.

Euronext shares jumped on the news, while those of Deutsche Borse slipped, suggesting that the markets were not aware of just how much cost could be stripped out of a combined Euronext/LSE operation.

Meanwhile, analysts are privately dismissive of claims by both Euronext and Deutsche Borse that so-called revenue synergies - sales of new products - were readily achievable.

However, even without these revenue synergies, analysts estimate that Euronext could afford to pay 620p to 640p per share for the LSE against Deutsche Borse's 530p. - Financial Times Service