Hong Kong Exchanges and Clearing proposes merger with LSE

  • Hong Kong Exchanges and Clearing proposes merger with LSE

Hong Kong Exchanges and Clearing proposes merger with LSE

One condition of Hong Kong Exchanges & Clearing £29.6 billion ($36.6 billion) bid for the London Stock Exchange is the rejection of the LSE's deal to acquire Refinitiv either be rejected by LSE shareholders or terminated.

Shares in London Stock Exchange Group surged 10 per cent after the approach was revealed but settled back at 5 per cent up by lunchtime.

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.

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.

HKEX mentioned: 'The proposed mixture would strengthen each companies, higher place them to innovate throughout markets and geographies, and provide market individuals and traders unprecedented worldwide market connectivity'.

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 move is just the latest in a string of takeover bids from overseas buyers aiming to take advantage of weakened sterling, which has made United Kingdom assets cheap for North American and Asian buyers.

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.

"Following early engagement with LSEG, we look forward to working in detail with the LSEG board to demonstrate that this transaction is in the best interests of all stakeholders, investors and both businesses".

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

LSE shares soared more than 15% in London on the 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.