Deutsche Börse has rejected the ideas for reform from its largest shareholders, The Children's Investment Fund (TCI) and Atticus Capital - this might set the stage for another showdown. The two activist hedge funds suggested that the exchange merge with a competitor and sell its clearing unit or possibly the whole company.

Deutsche Borse rejected the hedge funds' suggestions, perhaps setting the stage for another clash. Three years ago, Atticus and TCI battled with the German exchange, resulting in the ousting of the exchange's chairman and CEO.

According to media reports, Kurt Viermetz, chairman, and Reto Francioni, chief executive of Deutsche Börse, told TCI's founder Chris Hohn that they wanted to keep the group together. Viermetz also rejected the hedge fund's demand that he make way for a new chairman.

The moves came after TCI and Atticus last week agreed to work together with their 19.3 per cent combined stake and said they would consider all options, including board changes.

The scene has been set for a potential battle. On one side is the German stock exchange, backed by the State government and, possibly, Frankfurt's financial industry. On the other side, arguably two of the world's biggest activist funds, with a lot of clout. The first battle was already one by the funds. Will there be a second one - and if so, who will pay the price? Watch this space.