London Stock Exchange sees off takeover bid as Hong Kong rival abandons £32billion approach

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London Stock Exchange avoids a fall into the clutches of one of its global rivals as Hong Kong’s exchange abandons £32billion takeover bid

  • HKEX will not be making a firm offer after failing to win over the LSE board
  • Major shareholders and regulators were also said to be unconvinced 
  • The development clears the path for LSE’s  £21.9bn Refinitiv takeover

The London Stock Exchange has avoided a fall into the clutches of one of its global rivals after Hong Kong Exchanges and Clearing dropped a £32billion takeover bid.

HKEX said it will not be making a firm offer after failing to win over the LSE board during initial talks on its provisional approach.

The decision to walk away comes less than a month after HKEX launched the surprise move.

The London Stock Exchange will not fall into the clutches of rival Hong Kong Exchanges and Clearing after the £32bilion bid was dropped

The London Stock Exchange will not fall into the clutches of rival Hong Kong Exchanges and Clearing after the £32bilion bid was dropped

The writing seemed to be on the wall from the start with LSE quick to slam the approach as being at too low a valuation and ‘fundamentally flawed.’

HKEX had been making efforts to bypass the hostile board and go straight to major LSE shareholders but it appears they met a cold response there too.

There were also serious question marks over whether the government and regulators would allow a deal through, given the importance of the LSE to the City of London and wider British economy.

The ongoing political unrest in Hong Kong and the prospect of China getting greater access to sensitive financial information will also have given both the LSE and government reason to be concerned about the potential merger.

The announcement clears the path for the LSE to move forward with its £21.9billion deal to buy data company Refinitiv.

LSE had slammed the approach from HKEX as 'fundamentally flawed'

LSE had slammed the approach from HKEX as ‘fundamentally flawed’

HKEX had claimed the tie-up with the LSE would strengthen both businesses, give them better geographical reach and offer market participants and investors ‘unprecedented global market connectivity’.

It said: ‘The board of HKEX continues to believe that a combination of LSE and HKEX is strategically compelling and would create a world-leading market infrastructure group.’

‘Despite engagement with a broad set of regulators and extensive shareholder engagement, the board of HKEX is disappointed that it has been unable to engage with the management of LSE in realising this vision, and as a consequence has decided it is not in the best interests of HKEX shareholders to pursue this proposal.’

 

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