LONDON: – Hong Kong Exchanges and Clearing has made an unsolicited $39 billion takeover approach for the London Stock Exchange, a proposal contingent on the LSE ditching its acquisition of data company Refinitiv.
The move comes at a time of political turmoil in both Hong Kong and London and is aimed at creating a global trading power better able to compete with U.S. rivals such as ICE and CME.
The LSE has long sought to bolster its presence in Asia and recently launched a link scheme with HKEX competitor Shanghai.
“The board of HKEX believes a proposed combination with LSEG represents a highly compelling strategic opportunity to create a global market infrastructure leader,” the Hong Kong exchange said in a statement on Wednesday.
The LSE said it would review the proposal but added that it was committed to and continued to make good progress on its planned acquisition of Refinitiv from a consortium led by U.S. private equity firm Blackstone.
The approach by the Hong Kong company comes as Britain is set to leave the European Union, a step some politicians fear could weaken its status as a major financial centre.
“HKEX is fully committed to supporting and building the long term roles of both London and Hong Kong as global financial centres,” it added.
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. Some analysts saw the Hong Kong offer as a defensive move to scupper the Refinitiv deal and prevent the London exchange becoming a bigger rival like CME and ICE.
HKEX, whose main shareholder is the Hong Kong government, said its proposal represented a 22.9 percent premium to the LSE’s closing stock price on Tuesday.
