Hong Kong Exchanges Makes GBP29.6 Billion Bid Approach to London Stock Exchange -- Update
11 September 2019 - 8:34PM
Dow Jones News
--LSEG shares rose on the approach
--LSEG will consider the offer and respond in due course, and
remains committed to its Refinitiv deal
--The offer values each LSEG share at 8,361 pence, a 23% premium
to Tuesday's closing price
By Ian Walker
Shares of London Stock Exchange Group PLC (LSE.LN) jumped as
much as 16% in early trade Wednesday after the Hong Kong Exchanges
& Clearing Ltd. (0388.HK) said Wednesday that it has approached
the LSEG with a 29.6 billion pound ($36.54 billion) cash and share
offer.
Describing the deal as a "highly-compelling strategic
opportunity to create a global market infrastructure leader" the HK
Exchange said it would seek a recommendation from the LSEG
board.
"Following early engagement with LSEG, we look forward to
working in detail with the LSEG board to demonstrate that this
transaction is in the best interests of all stakeholders, investors
and both businesses," HK Exchange Chairwoman Laura Cha said.
LSEG said that it will consider the proposal and make a further
announcement in due course. It added that the board remains
committed to, and continues to make progress with, its proposed
acquisition of Refinitiv Holdings Ltd., as announced last
month.
LSEG shares at 0945GMT were up 446 pence, or 6.6%, at 7,250
pence, having peaked at 7,922 pence earlier in the session.
If the deal goes ahead, accepting LSEG shareholders would get
2,045 pence in cash and 2.495 new HK Exchange shares for each LSEG
share held. The offer values each LSEG share at 8,361 pence based
on the HK Exchange's closing share price of 245.20 Hong Kong
dollars ($31.28) on Sept. 10.
The price is a 23% premium to the LSEG's closing share price of
6,804 pence on Tuesday and puts an enterprise value on the exchange
of GBP31.6 billion, including debt.
If the deal goes ahead the HK Exchange said it will apply for a
second listing on the London Stock Exchange. It added that the HK
Exchange has already started talks with both Hong Kong and U.K.
regulators over the governance structure of the combined group.
It said that key LSEG management would continue to operate the
business and join the HK Exchange management if the deal
completes.
LSEG announced on Aug. 1 that it had agreed to buy Refinitiv,
the former financial data and risk business of Thomson Reuters, in
a $27 billion all-share deal including debt.
The exchange operator is buying the business from a consortium
of companies that includes Reuters and funds affiliated with U.S.
asset manager Blackstone Group Inc. (BX). Under the terms of the
proposed transaction the current owners of Refinitiv will retain a
37% stake in the combined business after completion.
Write to Ian Walker at ian.walker@wsj.com
(END) Dow Jones Newswires
September 11, 2019 06:19 ET (10:19 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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