The battle for the London Stock Exchange is heating up. The two suitors are Germany’s Deutsche Boerse and Paris-based Euronext. The LSE rejected Deutsche Boerse’s initial offer of 1.84 billion euros in December, saying it undervalued the business, but London left the door open for further discussions. Those are now underway, Deutsche Boerse chief Werner Seifert has been meeting with his LSE counterpart Clara Furse. There are reports that the German offer will be raised to 2.13 billion euros. Whoever wins the fight for the region’s biggest stock market will be number one in Europe and all but impossible to challenge.It would also be an attractive partner for the smaller markets such as Spain, Italy and those in Scandinavia. Euronext, which combines the Paris, Amsterdam, Brussels and Lisbon stock exchanges, is next up in this week’s talks with the LSE’s Clara Furse. Euronext boss Jean Francois Theodore is reported to be ready to raise two billion euros to fund an all cash counter offer. A cash bid would certainly be more attractive to LSE’s shareholders. However both sides have said that price is only one factor. In addition the London Stock Exchange’s customers, principally the big investment banks, have to be happy with the deal and with the merger structure that is created. It must also pass muster with the competition regulators.