Hong Kong Stock Exchange Makes $37 Billion Offer for LSE -- Update

By Steven Russolillo and Ben Dummett 

The operator of Hong Kong's stock exchange made an unsolicited proposal to acquire the London Stock Exchange Group PLC in a deal valued at nearly $37 billion.

Hong Kong Exchanges and Clearing Ltd. said a combination of two of the world's largest exchange operators would create a global leader in capital flows and financial data by connecting developed and emerging markets in the east and west.

The offer is aimed at thwarting a merger between the LSE and financial-information provider Refinitiv Holdings Ltd. Last month, the LSE said it planned to acquire Refinitiv for $14.5 billion in stock from a consortium led by private-equity firm Blackstone Group Inc. Including debt, the merger would be worth about $27 billion.

The London Stock Exchange said it would consider the HKEX proposal and that it remains committed to the proposal to acquire Refinitiv.

An HKEX deal would be conditional on the LSE dropping its bid for Refinitiv, according to a person familiar with the matter.

HKEX said its offer--valued at GBP29.6 billion in cash and stock--represents a 22.9% premium to the LSE's closing stock price on Tuesday. It proposed paying roughly a quarter of the purchase price in cash and the rest in stock. The total enterprise value for LSE, which includes debt, would be GBP31.6 billion.

LSE shares, which have soared following the Refinitiv deal announcement, jumped as much as 16% in Wednesday trading before trimming some gains.

The combination of the two exchanges "will redefine global capital markets for decades to come," HKEX Chief Executive Charles Li said Wednesday. "Both businesses have great brands, financial strength and proven growth track records."

"We believe we have put forward a proposal that is ambitious, far-reaching, and could have a transformative effect on global financial markets," he added.

The proposed merger comes at a time of heightened sensitivity in Hong Kong, which has grappled with months of unrest over China's encroachment over the territory.

Write to Steven Russolillo at [e-mail] and Ben Dummett at [e-mail]

(END) Dow Jones Newswires

September 11, 2019 06:13 ET (10:13 GMT)

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