Hong Kong exchange stuns the City with swoop on London Stock Exchange

Marco Green
September 11, 2019

The London Stock Exchange has received a surprise £29.6bn takeover offer from Hong Kong Exchanges and Clearing - a bid that threatens the United Kingdom group's £20bn-plus acquisition of U.S. data provider Refinitiv.

Shares in the London Stock Exchange (LSE) surged 10% higher after its Hong Kong rival revealed the cash-and-shares approach.

HKEX also noted that the acquisition would benefit both sides of the deal, with LSEG customers gaining better access to the Chinese market and the Hong Kong firm saying it wants to use the British exchange's trading and clearing technology.

The LSE announced in August that it has agreed to buy Refinitiv in a $27 billion deal aimed at transforming the exchange into a market data and analytics giant.

It previously bought the London Metal Exchange for £1.4B in 2012.

Responding to what it said was "an unsolicited, preliminary and highly conditional proposal", the LSE said it would consider the proposal but "remains committed to and continues to make good progress on its proposed acquisition of Refinitiv".

The proposed transaction values the LSEG at about 29.6 billion pounds (36.6 billion USA dollars), according to a statement by the HKEX.

The Asian bourse operator had considered the "ambitious and far-reaching" deal for one of Europe's largest exchanges for many months, HKEX Chief Executive Officer Charles Li said in a statement Wednesday.

"Shareholders won't be rushed to make a decision as we like the Refinitiv deal, he added".

"The proposal is a fascinating prospect, but far from a done deal". Visit MarketWatch.com for more information on this news.

The Refinitiv takeover had marked a major change of LSE strategy and comes two years after its failed £21-billion merger with Germany's Deutsche Boerse.

That big deal - the third failed attempt at a tie-up between the British and German stock exchange operators - was blocked by the European Commission on fears it would undercut competition.

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