(Yicai Global) Sept. 12 -- Hong Kong Stock Exchanges and Clearing's surprise USD36.6 billion bid to buy London Stock Exchange Group could founder over the LSEG's pursuit of market analytics firm Refinitiv.
A merger is only possible if LSEG abandons its bid for Refinitiv or its shareholders reject the deal, Chinese media reported HKEX Chief Executive Charles Li as saying. But LSEG's USD27 billion takeover bid for Refinitiv, which the London Stock Exchange operator is said to be reluctant to abandon, is awaiting a sign-off by shareholders.
"LSEG remains committed to and continues to make good progress on its proposed acquisition of Refinitiv Holdings Ltd. as announced on 1 August 2019," it said. "A circular is expected to be posted to LSEG shareholders in November 2019 to seek their approval of the transaction."
If HKEX's unsolicited bid comes to fruition, the merger would create an international bourse giant with total market capitalization of about USD70 billion spanning the three continents of Asia, Europe and America.
"Bringing HKEX and LSEG together will redefine global capital markets for decades to come," Li said. "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."
LSEG shareholders stand to receive GBP20.45 (USD25.20) in cash and 2.495 newly issued HKEX shares post-merger, per the HKEX proposal. The combination would set the London bourse operator's market cap at GBP31.6 billion (USD39 billion) based on the HKEX closing share price [HKG:0388] of HKD245.2 (USD31.20) on Sept. 10 and a 9.6865 Hong Kong dollar-pound exchange rate.
LSEG has HKEX's proposal in hand and will pick an opportune time to issue a statement, it told Yicai Global.
This is not the first time HKEX has made overtures to the LSEG. The Hong Kong exchange offered to buy ITS shares at a 47 percent premium in 2011, but its gambit ultimately fizzled. HKEX went on to acquire the London Metal Exchange in 2012.
Editors: Tang Shihua, Ben Armour