Economy

Hong Kong Exchanges makes £29.6bn bid for LSE

Hong Kong Exchanges makes £29.6bn bid for LSE”

Hong Kong Exchanges and Clearing (OTCPK:HKXCY) has made a £32B unsolicited bid to buy the London Stock Exchange (OTCPK:LDNXF), looking to break up the United Kingdom group's agreed deal for Refinitiv (BX, TRI).

Hong Kong Exchanges and Clearing's (HKEX) shock announcement pushed shares in LSE up 9pc initially before settling to a more moderate 5pc gain.

Richard Hunter, head of markets at interactive investor, said that while a merger between the LSE and HKEX would be "totemic" and make strategic sense given the complementary strengths of the two exchanges, this "initial shot" raised more questions than answers.

However, HKEX added that a condition of the offer would be LSE shareholders rejecting plans for a US$27bn all-share merger with Refinitiv, which was originally announced in July, before the end of the year. The UK company's stock rose 6.2 per cent to 7,190 pence on Wednesday at 10.54 am in London, after earlier surging as much as 16 per cent.

Neil Wilson, chief market analyst at Markets.com, said the bid was a "non-starter".

"It's a bold move and one that appears to have a low chance of success". Given the long and ignoble history of bids for LSE we think there is a very high bar to clear in order for this to succeed.

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". It may also be that the likes of the New York Stock Exchange will be looking on with interest'.

In short, Hunter said the proposal was "a fascinating prospect, but far from a done deal".

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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