The increased stake taken by hedge fund TCI in Deutsche Boerse has bolstered shares of the Frankfurt-based exchange operator. On Friday evening, Deutsche Boerse published a voting rights notification from TCI chief Chris Hohn, indicating that he had raised his direct holding to 1.35 percent from 0.96 percent, with potential access to a further 3.8 percent of shares via derivatives. The stock climbed 2.7 percent to 251 euros on Monday. An insider stated that TCI is not on a collision course this time - unlike some 20 years ago: the fund views itself as a long-term investor and does not plan to take an activist role. TCI declined to comment.

Deutsche Boerse stated: 'We welcome TCI's commitment and look forward to continuing our constructive dialogue, as we do with all our investors.' However, the British hedge fund's entry brought back memories for many market participants of 2004 and 2005: at that time, TCI (The Children's Investment Fund) forced the exchange to abandon its multi-billion euro takeover bid for the London Stock Exchange (LSE) and instead distribute the capital to shareholders. CEO Werner Seifert and Chairman Rolf Breuer subsequently resigned. TCI had also initially built a five percent stake back then.

In a research note, Jefferies analysts suggested that TCI's entry could be linked to Deutsche Boerse's planned multi-billion euro acquisition of the fund platform Allfunds. The protracted antitrust review of the takeover 'potentially opens a window for activist intervention,' they wrote.

(Reporting by Alexander Huebner, Anousha Sakoui and Tom Sims, edited by Olaf Brenner. For inquiries, please contact our editorial office at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)