LONDON MARKETS: LSE Surges As Merger Buzz Lifts London Stocks

By Steve Goldstein, MarketWatch

The London Stock Exchange Group surged Monday after the exchange operator announced merger talks, with the takeover chatter buoying the broader market.

The FTSE 100 rallied 1.22% to 7641.33, the best gain of the major European stock markets (http://www.marketwatch.com/story/europe-stocks-nudge-up-on-ma-and-earnings-news-as-lse-surges-while-heineken-fizzles-2019-07-29). Heavyweight Vodafone Group (VOD.LN) (VOD.LN) extended last week's gains from announcing it may sell its European towers business, with shares rising another 4% on Monday.

The M&A news didn't inspire the action across the Atlantic as U.S. stock futures pointed to a flat start for the Dow Jones Industrial Average . The U.S. Federal Reserve is due to cut interest rates on Wednesday, with the markets unsure whether the rate cut will be a quarter-point or a half-point.

In its first major deal since ex-Goldman Sachs executive David Schwimmer took the reins as CEO, the London Stock Exchange Group (LSE.LN) shares jumped 15% as the exchange operator said it's in talks to buy Refinitiv, owned by Blackstone (BX) and Thomson Reuters (TRI), in a $27 billion deal to bulk up its offerings of financial data and infrastructure.

Analysts at UBS, who rate LSE at neutral, said the deal would lift LSE earnings by 8% in its first year and by 20% in year three, excluding any refinancing benefits.

Just Eat(JE.LN) jumped 25% to 795 pence after it and Takeaway.com (TKWY.AE) announced merger talks, in a deal where the Dutch-listed group would buy the U.K.-listed company in a stock swap valuing Just Eat, using Friday's closing prices, at 731 pence a share. Activist investor Cat Rock has stakes in both food delivery companies and has been reported to be pushing for a deal.

Ferguson shares (FERG.LN) rose 2% as Sky News reported that Nelson Peltz's Trian (https://news.sky.com/story/activist-peltz-wants-plumber-ferguson-to-sell-uk-business-11772459) has urged the plumbing products distributor to sell its U.K. business.

(END) Dow Jones Newswires

July 29, 2019 06:14 ET (10:14 GMT)

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