LSEG Turns Coy as HKEX Says Dump Refinitiv in Merger Proposal

ZHANG YUANKE

(Yicai Global) Sept. 12 — Hong Kong Stock Exchanges and Clearing proposed a merger to the London Stock Exchange Group’s board yesterday, the HKEX said in a statement.

If the unsolicited bid comes to fruition, the union will create a bourse giant with total market capitalization of about USD70 billion that will span three time zones in Asia, Europe and America if it comes to fruition, but a takeover bid LSEG is making for London-based market analytics firm Refinitiv may prove a deal-breaker as the London bourse is said to be reluctant to abandon its suit as part of its shift from trading to monetizing data, The Financial Times reported.

LSEG shareholders stand to receive GBP20.45 (USD25.2) in cash and 2.495 newly issued HKEX shares post-merger, per the HKEX proposal. The fusion would set the London bourse’s market cap at GBP31.6 billion (USD39 billion) based on the HKEX closing share [HKG:0388] price of HKD245.2 (USD31.2) on Sept.10 and a 9.6865 Hong Kong dollar-pound exchange rate.

Tentative feelers have been put out to the LSEG, HKEX president Charles Li said, adding the transaction is expected to better connect the two and fully support their data and index strategies. The deal is only possible if LSEG suspends its Refinitiv takeover, however, Li noted.

It has HKEX’s proposal in hand and will pick an opportune time to issue a statement, LSEG told Yicai Global. “LSEG remains committed to and continues to make good progress on its proposed acquisition of Refinitiv Holdings Ltd. as announced on 1 August 2019,” LSEG stated. “A circular is expected to be posted to LSEG shareholders in November 2019 to seek their approval of the transaction,” it added.

This is not the first time HKEX has made overtures to the LSEG. The Hong Kong exchange offered to buy ITS shares at a 47 percent premium in 2011, but its gambit ultimately fizzled. HKEX went on to acquire the London Metal Exchange in 2012.

Editors: Tang Shihua, Ben Armour