HKEX makes £29.6 billion bid for the London Stock Exchange

Daniel Fowler
September 11, 2019

The blockbuster proposal including debt, worth 1.2 trillion baht, is dependent on the London Stock Exchange Group (LSEG) scrapping a proposed $27-billion takeover of U.S. financial data provider Refinitiv.

HKEX says the combination would create a leading market infrastructure group with a global footprint and, crucially, close ties to China.

The Refinitiv deal was a bet by LSE on a future dominated by data, as the three-century-old exchange looks for ways to extend its global reach.

The Hong Kong exchange group has made an unsolicited offer of £32 billion ($39.6 million) for the company.

Investors seemed sceptical, with LSE's shares rising 5.6% to 7,182p in late morning on Wednesday, well off HKEX's offer price.

"It's a bold move and one that appears to have a low chance of success".

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"HKEX bought LME a few years ago so have a presence in the United Kingdom already, but clearly they are trying to diversify away from their Chinese exposure, which is why they are bidding now and not nine months ago." he said.

The proposed deal would see the migration of HKEX's trading and clearing platforms to LSEG's technology, leading, says HKEX, to a revenue uplift in key businesses from cross-selling and innovation opportunities and a reduction in HKEX's capital expenditures in connection with existing systems and future investment plans.

"This is an initial shot, however". 'The London Stock Exchange has historically fought off approaches from overseas, preferring instead to be the acquirer.

"The proposal is a fascinating prospect, but far from a done deal". It may also be that the likes of the New York Stock Exchange will be looking on with interest'.

Shares in the London Stock Exchange Group jumped by more than 15% on news of the offer, but fell back later.

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