Hong Kong Exchanges makes £29.6bn bid for LSE

Hong Kong Exchanges makes £29.6bn bid for LSE

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.

The last-gasp offer could also spark a bidding war for the exchange if other suitors offer a more generous price.

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

HKEX's offer comes just five weeks after the LSE announced its own deal, a surprise merger with data group Refinitiv which is part of Thomson Reuters.

In response to HKEX's announcement, the LSE said it was committed to and continued to make good progress on its proposed acquisition of Refinitiv.

The Hong Kong company said a deal would create a combined group "ideally positioned to benefit from the evolving global macroeconomic landscape, connecting the established financial markets in the West with the emerging financial markets in the East, particularly in China".

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

The cash-and-shares offer is worth £31.6 billion including £2.0 billion of debt, HKEX added.

The LSE and the Hong Kong exchange are both in cities where political upheaval threatens their businesses.

Should the proposed takeover be successful, it is expected that key LSE management would continue to operate LSE businesses, HKEX said.

Both exchange operators have been involved in bourse merger deals in recent years, with LSE failing in its attempt to combine with Deutsche Boerse AG and HKEX acquiring London Metal Exchange in 2012 for £1.4 billion.

The Asian exchange, however, said it was confident the takeover faced no major regulatory hurdles due to little overlap in markets.

Business secretary Andrea Leadsom said the government "would have to look very carefully at anything that potentially had security implications" for the UK. "It's about connecting what Hong Kong is now, the largest custody centre for investors with Chinese assets".

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

Related Articles