Hong Kong Exchange to Pursue LSE Buyout Despite Rejection

LSE was quick to reject the $39 billion offer from HKEX and plans to continue with $27 billion Refinitiv acquisition.
Anthony RussoSep 13,2019,17:20

Just daysafter the London Stock Exchange Group (LSE) received a $36.6 billion buyout offer from Hong Kong Exchanges and Clearing Ltd., (HKEX) LSE announced today it unanimously rejects the proposal.

LSE’s board sees “fundamental concerns” with key terms under the offer, such as strategy, deliverability form consideration and value, the company said in its statement today. 

“We do not see strategic merit for LSEG in your proposed transaction. Our planned acquisition of Refinitiv meets LSEG’s strategic objectives across its businesses which the Board believes to be critical for a leading Financial Markets Infrastructure provider of the future.”

The potential deal with HKEX and LSE would have crossed LSE’s $27 billion offer to acquire Reinitiv, which provides financial marketing data in London. Instead LSE will continue its focus and continue to make progress in the potential acquisition of Refinitv, according to the company’s statement today. 

“I don’t expect HKEX to walk away without trying more,” Massimo Stabilini said, a former executive of Paulson & Co. Inc., a New York based investment firm, who runs his own hedge fund, Sinclair Capital currently, according to Bloomberg. “I expect them to come back with a better offer and with a higher cash component.”

LSE also said the proposal made by LSE would be compromised by a number of financial regulators and the UK Enterprise Act, which was established 2002 designed to concern the ownership and regulation of organizations.