London Stock Exchange rejects £31.2bn HKEX bid

Mark Johnson's picture
by Mark Johnson

The London Stock Exchange has rejected a £31.2 billion takeover offer from its Hong Kong-based rival.

Late on Friday afternoon, the London Exchange issued a statement saying it had considered the unsolicited, preliminary and highly conditional proposal from Hong Kong Exchanges and Clearing Limited (“HKEX”) to acquire the entire share capital of the London Stock Exchange Group.

“The Board has fundamental concerns about the key aspects of the Conditional Proposal: strategy, deliverability, form of consideration and value” LSEG said. 

“Accordingly, the Board unanimously rejects the Conditional Proposal and, given its fundamental flaws, sees no merit in further engagement.”

Letter to HKEX 

LSEG added that it had sent a letter to HKEX setting out the reasons for its rejection. 

The Hong Kong exchange later issued a statement saying would now press on with more talks with LSE investors in an effort to bring them round. 

“HKEX continues to believe that its proposal is in the best interests of shareholders, customers and for global capital markets as a whole. 

“HKEX believes that shareholders in LSEG should have the opportunity to analyse in detail both transactions and will continue to engage with them”, it said.

LSE proceeding with Refinitiv deal

The London exchange said it would continue with its proposed acquisition of Refinitiv Holdings Ltd, a £22 billion deal that it would have been forced to abandon as part of the HKEX offer. 

“Regulatory approval processes are under way and a circular is expected to be posted to LSEG shareholders in November 2019 to seek their approval of the transaction”, LSEG said adding that it Refinitiv transaction remains on track to close in the second half of next year.

LSEG is itself listed on the London Stock Exchange, and its shares were trading 3.6% higher at £75.14 by the market close on Friday.

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