Hong Kong Stock Exchange Makes $37 Billion Offer for LSE -- Update
September 11 2019 - 6:28AM
Dow Jones News
By Steven Russolillo and Ben Dummett
The operator of Hong Kong's stock exchange made an unsolicited
proposal to acquire the London Stock Exchange Group PLC in a deal
valued at nearly $37 billion.
Hong Kong Exchanges and Clearing Ltd. said a combination of two
of the world's largest exchange operators would create a global
leader in capital flows and financial data by connecting developed
and emerging markets in the east and west.
The offer is aimed at thwarting a merger between the LSE and
financial-information provider Refinitiv Holdings Ltd. Last month,
the LSE said it planned to acquire Refinitiv for $14.5 billion in
stock from a consortium led by private-equity firm Blackstone Group
Inc. Including debt, the merger would be worth about $27
billion.
The London Stock Exchange said it would consider the HKEX
proposal and that it remains committed to the proposal to acquire
Refinitiv.
An HKEX deal would be conditional on the LSE dropping its bid
for Refinitiv, according to a person familiar with the matter.
HKEX said its offer--valued at GBP29.6 billion in cash and
stock--represents a 22.9% premium to the LSE's closing stock price
on Tuesday. It proposed paying roughly a quarter of the purchase
price in cash and the rest in stock. The total enterprise value for
LSE, which includes debt, would be GBP31.6 billion.
LSE shares, which have soared following the Refinitiv deal
announcement, jumped as much as 16% in Wednesday trading before
trimming some gains.
The combination of the two exchanges "will redefine global
capital markets for decades to come," HKEX Chief Executive Charles
Li said Wednesday. "Both businesses have great brands, financial
strength and proven growth track records."
"We believe we have put forward a proposal that is ambitious,
far-reaching, and could have a transformative effect on global
financial markets," he added.
The proposed merger comes at a time of heightened sensitivity in
Hong Kong, which has grappled with months of unrest over China's
encroachment over the territory.
Write to Steven Russolillo at steven.russolillo@wsj.com and Ben
Dummett at ben.dummett@wsj.com
(END) Dow Jones Newswires
September 11, 2019 06:13 ET (10:13 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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