Published: Wed, September 11, 2019
Economy | By

Hong Kong exchange makes surprise US$36.6b bid for LSE

Hong Kong exchange makes surprise US$36.6b 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 USA financial data provider Refinitiv.

The Hong Kong Stock Exchange has bid nearly £32 billion for its London rival in a shock move Wednesday to bring together two of the world's largest financial hubs in Asia and Europe.

The chairman of Hong Kong Exchanges and Clearing said combining the two exchanges would bring together "the largest and most significant financial centres in Asia and Europe".

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.

In terms of future governance, HKEX says it has begun conversations with certain regulators in the United Kingdom and Hong Kong and looks forward to discussing the transaction in detail with LSEG and all relevant regulatory bodies. "The share price reaction one hour after the approach says the market does not believe it will be successful".


In explaining the rationale for the proposed transaction, HKEX said that the proposed combination would "strengthen both businesses, better position them to innovate across markets and geographies, and offer market participants and investors unprecedented global market connectivity".

'This is an initial shot, however. The London Stock Exchange has historically fought off approaches from overseas, preferring instead to be the acquirer.

In short, Hunter said the proposal was "a fascinating prospect, but far from a done deal". It may also be that the likes of the New York Stock Exchange will be looking on with interest'.

LSEG shares jumped by 15 percent - to just over £78 - after the news was made public, before falling back down to £72.

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