Hong Kong Exchanges and Clearing has made a £32bn unsolicited bid to buy the London Stock Exchange Group, aiming to break up its agreed deal with Refinitiv.
HKEX has offered £20.45 a share in cash and 2.495 newly issued HKEX shares, valuing the LSE at £83.61 a share. That is a 23 per cent premium to LSE’s closing price on Tuesday. LSE shares soared more than 7 per cent to £73 on the news.
“Bringing HKEX and the London Stock Exchange together will redefine global capital markets for decades to come,” said Charles Li, chief executive of HKEX. “Both businesses have great brands, financial strength and proven growth track records. Together, we will connect East and West, be more diversified and we will be able to offer customers greater innovation, risk management and trading opportunities.”
The LSE had no immediate comment.
The deal, if completed, would be by far the largest in HKEX’s history. It previously bought the London Metal Exchange for £1.4bn in 2012. Mr Li is trying to make HKEX a “department store” for investors looking to increase their exposure to China, in a bet that Beijing will persist with its ambition to open its capital markets to the rest of the world.
HKEX’s move comes as China tries to cushion the impact of an economic slowdown and trade war with the US by scrapping a quota system for foreign institutional investment.
“LSEG and HKEX operate some of the most significant financial infrastructure in two of the world’s most important financial markets. Together, they will create a world-leading global exchange that spans Asia, Europe and the United States”, Mr Li said.
Mr Li said the move was “a vote of confidence in London and the United Kingdom’s future role as a global financial centre [that] strengthens the City’s hand, ensures it will benefit from growth opportunities in Asia and that it plays a leading role in the RMB becoming a major global reserve currency in the future”.