Hong Kong exchange makes £30bn offer for London Stock Exchange

Hong Kong exchange makes £30bn offer for London Stock Exchange

Hong Kong exchange makes £30bn offer for London Stock Exchange

Hong Kong Exchanges and Clearing said on Tuesday that it is planning to acquire the London Stock Exchange Group.

The LSE said it will consider its Hong Kong rival's offer, which it called "unsolicited, preliminary, and highly conditional".

The proposed 31.6 billion pounds cash-and-share transaction would only go ahead if the LSE's takeover of Refinitiv does not proceed, HKEX said.

HKEX chairman Laura Cha said: "We believe a combination of HKEX and LSEG represents a highly compelling strategic opportunity to create a global market infrastructure group, bringing together the largest and most significant financial centres in Asia and Europe".

Richard Hunter, head of markets at interactive investor, said that while a merger between the LSE and HKEX would be "totemic" and make strategic sense given the complementary strengths of the two exchanges, this "initial shot" raised more questions than answers.

LSE's board said it would consider the proposal and will make a further announcement in due course. LSE shares jumped nearly 9% to 7,400 pence on Wednesday morning.

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

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The deal would "redefine global capital markets for decades to come", said Charles Li, chief executive of the Hong Kong company.

The Hong Kong Stock Exchange has made a blockbuster bid for the London Stock Exchange Group equivalent to 1.2 trillion baht.

HKEX said in its statement that its offer is subject to LSEG shareholders voting down the deal, or LSEG dropping its bid for Refinitiv.

LSEG stock surged 6.5% on the news.

Another recent case is pub group Greene King's possible sale to a Hong Kong based investment firm.

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

Meanwhile, analysts over at Bank of America Merrill Lynch were also sceptical, saying the offer price was below their price objective for the LSE and that given the "regulatory complexity" they preferred the Refinitiv merger.

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