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Hong Kong exchange vows to press on with $39bn LSE bid after rebuff

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LONDON: Hong Kong’s exchange refused to give up on its bid to take over the London Stock Exchange after the British bourse emphatically rejected its $39 billion takeover offer. The Hong Kong exchange said it would now hold more talks with LSE investors as it considers its next step, aiming to keep alive its hopes of becoming a more global player to rival US giants ICE and CME. “HKEX believes that shareholders in LSEG should have the opportunity to analyse in detail both transactions and will continue to engage with them,” it said in a statement.


The LSE said, as it rebuffed the Hong Kong approach, that it was sticking with its $27 billion acquisition of data and analytics company Refinitiv — a deal that the HKEX offer had required the London exchange to abandon.


It told HKEX in a letter that it had fundamental concerns about key aspects of its takeover proposal which it said had no strategic merit, and that HKEX’s relationship with the Hong Kong government would “complicate matters”.


HKEX’s valuation of the LSE falls “substantially short” and the “ongoing situation in Hong Kong” adds to uncertainty for shareholders, the London bourse added, a reference to weeks of pro-democracy street protests in the former British colony.


“Accordingly, the board unanimously rejects the conditional proposal and, given its fundamental flaws, sees no merit in further engagement,” the LSE said in a statement.


HKEX, Hong Kong Exchanges and Clearing, said it was disappointed the LSE has refused to “properly engage” in a compelling proposal.


A source close to HKEX added the quick dismissal of the surprise offer meant the Hong Kong bourse had very little time to discuss their proposal with investors, a sentiment echoed by some shareholders.


“As shareholders in LSE, it’s difficult to evaluate the merits of a combination with HKEX as we have been given no information on potential synergies,” said James Bevan, chief investment officer at CCLA, which holds a small stake.


LSE shares, however, rose on the news of the offer rejection and closed up 2.73 per cent at 7,450 pence. — Reuters


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