London Stock Exchange gets £32bn Hong Kong bid

Cornelia Mascio
Сентября 11, 2019

The Hong Kong Stock Exchange (HKEX) has launched a susprise bid to merge with the London Stock Exchange (LSE), offering United States dollars 36.5 billion in cash and shares, The Guardian reports.

The offer faces several hurdles, as LSE's board "remains committed to" the acquisition of Refinitiv as it considers what it called an unsolicited, preliminary and highly conditional proposal.

If completed, the deal would be the largest in HKEX's history.

"Hong Kong Exchanges and Clearing Limited (HKEX) today announces that it has made a proposal to the board of LSEG to combine the two companies", it said in a statement.

The proposed transaction implied a value for each London Stock Exchange share of about 8,361p, based on the HK$245.20 closing price of Hong Kong Stock Exchange shares on Tuesday. The UK company's stock rose 6.2 per cent to 7,190 pence on Wednesday at 10.54 am in London, after earlier surging as much as 16 per cent.

"The proposal is a fascinating prospect but far from a done deal", Hunter said.

The LSE has a separate $27 billion deal to acquire Refinitiv, which is owned by Blackstone and Thomson Reuters.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move.

"A combined group will be strongly placed to benefit from the dynamic and evolving macroeconomic landscape, whilst enhancing the longterm resilience and relevance of London and Hong Kong as global financial centres".

LSE's efforts to merge with Deutsche Boerse were ultimately scuppered by political considerations. HKEX's proposed move could fall at the same hurdle, said Ronald Wan, chief executive at Partners Capital International Ltd in Hong Kong.

"A takeover from Hong Kong, a special administrative region of China, could be seen as a takeover from China".

Richard Hunter, head of markets at Interactive Investor, commented: 'The proposed offer would be totemic in terms of East-West relations and the complementary strengths of the two exchanges would make strategic sense. The LSE has long sought to bolster its footprint in Asia and recently launched a link with Shanghai.

HKEX said it meant to apply for a secondary listing of its shares on the LSE once the deal has gone through.

It is expected that key LSE management would continue to operate LSE businesses, HKEX said.

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