LSE.L - London Stock Exchange Group plc

LSE - LSE Delayed Price. Currency in GBp
7,256.00
-94.00 (-1.28%)
At close: 4:36PM BST
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Previous Close7,350.00
Open7,340.00
Bid7,274.00 x 0
Ask7,278.00 x 0
Day's Range7,256.00 - 7,344.00
52 Week Range1,656.00 - 7,922.00
Volume582,864
Avg. Volume879,300
Market Cap25.377B
Beta (3Y Monthly)0.38
PE Ratio (TTM)53.43
EPS (TTM)135.80
Earnings DateAug 1, 2019 - Aug 11, 2019
Forward Dividend & Yield0.40 (0.54%)
Ex-Dividend Date2019-08-22
1y Target Est4,810.83
  • LSE rejects Hong Kong's $39 bln takeover offer
    Reuters Videos

    LSE rejects Hong Kong's $39 bln takeover offer

    In June this year the London Stock Exchange struck a deal to allow UK companies to sell shares in China, and Chinese companies to do the same in London. It might have been the kind of link-up the Hong Kong stock exchange was hoping for when it made a surprise $39 billion takeover bid for the London exchange this week. But that bid has now been emphatically rejected for a host of reasons listed in an LSE statement. The Hong Kong Exchange's valuation of the LSE falls, quote, "substantially short," it says. Its relationship with the Hong Kong government - its biggest shareholder - would quote, "complicate matters." And the ongoing unrest there adds to uncertainty for shareholders. The LSE intends, it says, to stick with its strategy of expanding into data with its $27 billion deal for Refinitiv, a deal it would have needed to drop as a condition of the offer. It sees, it concludes, "no merit in further engagement." Some analysts expect Hong Kong Exchange's CEO Charles Li to table an improved offer. But the blunt tone of the rejection indicates it could be a major challenge to bring the LSE around to his thinking. And if he fails, say analysts, his only options may be to withdraw - or make a hostile, rather than a friendly, bid.

  • Pound surges as fears of no-deal Brexit ease
    Yahoo Finance Video

    Pound surges as fears of no-deal Brexit ease

    Yahoo Finance's Edmund Heaphy breaks down what's going on in overseas markets on Friday, September 13, including the unanimous vote by the board of the London Stock Exchange against the Hong Kong Stock Exchange's acquisition offer and the easing fears of a no-deal Brexit.

  • Financial Times

    HKEX monopoly has fuelled disaffection

    HKEX is not only Hong Kong government-controlled via the appointment of directors and a preselection system for board posts. It has a monopoly on all stock, bond, commodity, futures and derivatives trading and clearing. HKEX is, in short, one of the many monopolies and oligopolies that rule the economy here and are a major ingredient in the current disaffection.

  • South China Morning Post

    HKEX's bid for London Stock Exchange is no big deal amid the flurry of worldwide big-ticket mergers and acquisitions

    Hong Kong Exchanges and Clearing's surprise bid for the London Stock Exchange highlights two significant changes afoot: consolidation in the world's stock markets and the tougher challenge Hong Kong faces in selling itself as the needed gateway to China, as increasingly violent protests ratchet up questions about its future.HKEX's US$36.6 billion takeover bid " which it continues to push despite the London exchange's quick and sharply worded rejection " would be one for the history books. If it came to be, it would make 2019 by far the biggest year ever in the amount of money spent on M&A; deals by the world's stock exchanges.Adding in the HKEX proposal, 2019 has seen a record US$66.08 billion in such proposed or successful deals, according to data company Refinitiv, which is itself a target of an acquisition pitch by the London exchange. That is 25 times more than the value of deals last year " US$2.45 billion " and almost three times the amount in 2006, which at US$24.98 billion has held the record as the top year of M&A; activity at exchanges.London Exchange rejects Hong Kong's surprise takeover bid in strongly worded endorsement of Shanghai as 'preferred partner'"Consolidation has been, and will continue to be, the trend for global exchanges worldwide to achieve their future growth of businesses," said Xavier Rolet, former chief executive of LSE in a telephone interview with the South China Morning Post."Eventually, there may be only about three to six major global players that survive, with at least one anchored with the Shanghai Stock Exchange and the other with US," he added.In addition to gaining data and technology, exchanges are hungry for benefits from consolidation in risk management and settlement, as well as initial public offerings and other capital formation, Rolet said.As part of its offer made on Wednesday, HKEX said the London bourse would have to drop its acquisition offer of Refinitiv, which was only made on August 1.The London bourse wants Refinitiv to make it stronger in data and technology. And it says the deal is on.For HKEX, a successful deal would mean geographical expansion, marrying one of the biggest stocks markets in Asia (Tokyo is the largest by market capitalisation, followed by Shanghai) with Europe's second-largest stock market (Euronext is larger).As HKEX chief executive Charles Li Xiaojia said in a teleconference on Wednesday about the bid, "It is time to bring in one of the largest exchanges in Asia and in Europe together for a marriage to create a global exchange."LSE and Refinitiv "would be too large for HKEX to consider. Hence the merger preconditioned on the Refinitiv deal being dropped," according to a research note of Citi, which rating HKEX a "sell" after the deal, which it does not expect will be approved.Nomura, however, sees merits to the proposal."The proposed combination will be a value-add for both HKEX and London Stock Exchange group in our view, as their businesses are highly complementary in terms of geography and product services," said Donald Tang Shengbo, head of China Financial and fintech research of Nomura International in a research note."But there is limited visibility on the success of the transaction as of now as it is at a very early stage," Tang said, added the HKEX would need to get shareholders of both exchanges to approve the deals while it would also face multiple regulatory approvals in the UK, US and Europe."(W)e do not believe HKEX provides us with the best long-term positioning in Asia or the best listing /trading platform for China," LSE chairman Don Robert wrote to his Hong Kong counterpart Laura Cha Shih May-lung and Li.Robert also raised Hong Kong's protests and its future in the bid's rejection."We see the value of your share consideration as inherently uncertain. The ongoing situation in Hong Kong adds to this uncertainty. Furthermore, we question the sustainability of HKEX's position as a strategic gateway in the longer term," he wrote.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.

  • Reuters

    UPDATE 2-UK markets watchdog calls for EU action to avoid Brexit disruption

    Overlapping British and European Union share trading rules would damage markets "to no good end" and can be avoided if the bloc is more accommodative, Britain's top markets watchdog said on Monday. Britain is due to leave the EU on Oct. 31, but has yet to agree a divorce settlement with the bloc. "It is therefore easy to conclude that for those shares, market liquidity would be damaged to no good end," Financial Conduct Authority Chief Executive Andrew Bailey said in a speech at Bloomberg.

  • China Rebuff Leaves Hong Kong Bourse Isolated in Bid for LSE
    Bloomberg

    China Rebuff Leaves Hong Kong Bourse Isolated in Bid for LSE

    (Bloomberg) -- The Hong Kong bourse’s unsolicited takeover bid for the London Stock Exchange Group Plc suffered a further setback after China praised the British firm’s scathing rebuff.The official People’s Daily wrote Saturday that there are “persistent worries” about Hong Kong given the current unrest, and lauded the LSE for citing its existing tie-up with the Shanghai Stock Exchange as its preferred way to access China. With almost half the pursuing bourse’s board nominated by Hong Kong’s Beijing-backed chief executive, the slapdown from the mouthpiece of the Communist party signals growing resistance to the bid.“The LSE rejection alone would probably have derailed HKEX’s ambitions, but the People’s Daily article surely represents the end of any acquisition hopes,” said Brock Silvers, managing director at Kaiyuan Capital.The People’s Daily piled on following LSE Chairman Don Robert’s strong rejection of the bid, issuing on Friday a laundry list of geopolitical and business reasons why the LSE finds the $36.8 billion proposal wanting. The offer had problems with “strategy, deliverability, form of consideration and value,” he said. The People’s Daily also took a swipe at the popular resistance to China’s increasing control over the city.“Some people in Hong Kong still have a negative view toward integrating into the development of the nation, as they don’t see what opportunities it brings to Hong Kong,” according to the commentary. “This doesn’t only show how short-sighted it is from an economic perspective, but also how narrow-minded from a political perspective.”A spokesman for HKEX on Saturday said the bourse had no immediate comment on the People’s Daily’s article. HKEX shares were down 2.2% on Monday. LSE shares fell 2.1% in early trading in London.Charles Li, the chief executive of the Hong Kong Exchanges & Clearing Ltd., appears undeterred by the LSE’s rejection and is preparing to make his case for the takeover directly to LSE investors. Beyond the political, regulatory and commercial hurdles HKEX faces, the Hong Kong bourse is also demanding LSE walk away from its own $27 billion deal for data provider Refinitiv.With the purchase of Refinitiv, the former Thomson Reuters financial and risk business, LSE is seeking to transform itself into a global force in data and trading platforms. The deal is central to its strategy and has proved popular with investors, sending LSE shares surging even before HKEX came knocking.Ron Arculli, a former HKEX chairman, said he thought LSE’s rejection letter offered HKEX a glimmer of hope. By saying that the initial bid undervalued the U.K. company, the London exchange may have left “a little crack in the door that may still be open,” Arculli said in a Bloomberg Television interview Monday.The Hong Kong stock exchange is planning to undermine LSE’s case for buying Refinitiv and characterized the company as a low-growth utility weighed down with debt.The dealmaking for LSE involves some of the world’s highest-profile financiers. Stephen Schwarzman’s Blackstone Group is on one side, as lead investor in Refinitiv; on the other, Ken Moelis’s firm is advising HKEX. The winning side will have to persuade the $320 billion Qatar Investment Authority, the sovereign wealth fund and the LSE’s biggest shareholder, which has so far declined to comment on the HKEX proposal.Here is a rundown of the LSE’s criticisms of the offer:There’s not enough cash in the bid, which is too low anyway.“Three-quarters of your proposed consideration is in HKEX shares, representing a fundamentally different and much less attractive investment proposition to our shareholders.“Even assuming your proposal were deliverable, its value falls substantially short of an appropriate valuation.”Hong Kong’s unrest makes that stock even less attractive.“We see the value of your share consideration as inherently uncertain. The ongoing situation in Hong Kong adds to this uncertainty. Furthermore, we question the sustainability of HKEX’s position as a strategic gateway in the longer term.”Then there’s HKEX’s unusual relationship with its government.“There is no doubt that your unusual board structure and your relationship with the Hong Kong government will complicate matters,” the LSE said.The Chinese territory’s government holds 6% of HKEX’s stock and appoints 6 of the 13 board members. The city’s chief executive -- a person appointed by Beijing -- picks HKEX’s chairman.That relationship will concern U.S. and other authorities.“Your proposal would be subject to full scrutiny from a number of financial regulators, as well as governmental entities under, for example, the U.K. Enterprise Act, the CFIUS [national security] process in the U.S., and the ‘golden powers’ regime in Italy,” the LSE said. “Your assertion that implementation of a transaction would be ‘swift and certain’ is simply not credible.”LSE already has a bridgehead in China: Shanghai.This “is our preferred and direct channel to access the many opportunities with China,” the LSE said.They worked long and hard to get it: the Shanghai exchange interlisting project dates to 2015, when former finance minister George Osborne traveled to China to court officials. After a long wait while LSE sought Chinese approvals, Huatai Securities Co. became the first Stock Connect listing in London in June.LSE also slammed HKEX’s own business as old school.“The high geographic concentration and heavy exposure to market transaction volumes in your business would represent a significant backward step for LSEG strategically.”Robert ended the letter with a final dig. “Given the fundamental flaws in your proposal, we see no merit in further engagement.”(Updates with HKEX share decline in sixth paragraph.)\--With assistance from Kiuyan Wong and Silla Brush.To contact the reporters on this story: Andrew Davis in London at abdavis@bloomberg.net;Alfred Liu in Hong Kong at aliu226@bloomberg.netTo contact the editors responsible for this story: Sree Vidya Bhaktavatsalam at sbhaktavatsa@bloomberg.net, Marion Dakers, James HertlingFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Financial Times

    FirstFT: Today’s top stories 

    The rally, which followed news that Saudi Arabia’s oil production is expected to be well below maximum capacity for weeks, set oil on course for one of its biggest one-day gains as traders worried over the extent of the outage. Brent crude oil, the international benchmark, gained almost $12 to trade as high as $71.95 a barrel, before easing back to $65.21 in the European morning, still up 8.5 per cent. The US benchmark, West Texas Intermediate, was up as much as 16 per cent to $63.64 a barrel before paring back these gains to $59.25, or 8 per cent up.

  • Hong Kong IPOs Rush to Beat the Clock
    Bloomberg

    Hong Kong IPOs Rush to Beat the Clock

    (Bloomberg Opinion) -- Hong Kong’s IPO market is unexpectedly coming back to life. It may be a brief revival.Companies from Anheuser-Busch InBev SA’s Asian unit to Megvii Technology Ltd. aim to raise more than $10 billion selling shares before the year is out. It’s a turnaround that appeared improbable as recently as mid-August, when the Hang Seng Index erased its gain for the year amid anti-government protests and concerns over weakening global growth.Hong Kong’s benchmark stocks gauge has bounced 8% since Aug. 13, among the best-performing indexes worldwide in that period, as traders bet that China’s government will try to buoy investor spirits in the run-up to Oct. 1, when the country celebrates the 70th anniversary of the founding of the People’s Republic. That’s created a window of opportunity for companies that previously struggled to generate enough investor interest.Budweiser Brewing Company APAC Ltd. is the prime example. The unit of AB InBev, the world’s largest brewer, pulled what would have been the world’s biggest initial public offering in mid-July after failing to draw sufficient demand for the $9.8 billion sale. The company is back with a pared-down $5 billion offering and aims to list by the end of September, Carol Zhong, Julia Fioretti, Jinshan Hong and Crystal Tse of Bloomberg News reported last week, citing people familiar with the matter.The brewer is seeking to list minus its Australian operations, which the company agreed to sell to Asahi Group Holdings Ltd. for $11.3 billion soon after withdrawing its IPO in July. That hived off a slower-growing part of its operations, which may help attract investors who balked at Budweiser Brewing’s valuation last time around.Other than a rising stock market, a simple technical reason may account for the brewer’s haste to try again. A company that seeks to list within six months of its first application doesn’t need to prepare a new set of accounts, meaning Budweiser Brewing can just strip the Australian operations from its financials when pitching to investors this time around.Others lining up at the IPO well include Megvii, a Beijing-based artificial intelligence startup that’s seeking $1 billion;  consumer lender Home Credit NV,  which is targeting as much as $1.5 billion; Chinese sportswear retailer Topsports International Holdings Ltd., which aims to raise about $1 billion; and ESR Cayman Ltd., a logistics real estate developer backed by Warburg Pincus that earlier shelved a $1.2 billion deal. The first to list of the current crop may be biotechnology firm Shanghai Henlius Biotech Inc., which has already started taking orders for a $477 million sale.The biggest flotation of all may come in October, when New York-traded Alibaba Group Holding Ltd. will seek to raise as much as $15 billion in a secondary listing, Reuters reported last month.The resurgence in the IPO market is a tonic for Hong Kong Exchanges & Clearing Ltd., which has faced skepticism over its $36.6 billion bid for London Stock Exchange Group Plc and whose shares have dropped 16% from this year’s high. Hong Kong has slipped in the pecking order of global stock exchanges after topping the rankings in 2018. Companies raised $10.8 billion in IPOs this year through Sept. 13, less than half of the total in the same period last year.The question is whether there will be enough investor demand to soak up all the stock that an eager and growing group of listing candidates is waiting to thrust on buyers. Meanwhile, Hong Kong’s economy is deteriorating and the protests haven’t gone away. Companies must also consider whether China’s feelgood efforts will extend beyond Oct. 1.Time may be of the essence for this crowd. To contact the author of this story: Nisha Gopalan at ngopalan3@bloomberg.netTo contact the editor responsible for this story: Matthew Brooker at mbrooker1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • South China Morning Post

    London Stock Exchange rejection 'shows Hong Kong can't make it alone'

    The London Stock Exchange Group's preference for Shanghai over Hong Kong as a Chinese market partner shows that the southern city cannot break away from the mainland and develop on its own, according to a Communist Party mouthpiece.In a commentary published late on Saturday, People's Daily said that getting access to future opportunities in China depended on how well the city consistently aligned with the country's interests.The comments came after the London bourse operator rejected Hong Kong Exchanges and Clearing's (HKEX) surprise takeover bid last week, saying that it did not believe HKEX would give London "the best platform" for China. Instead, it said, it valued its partnership with the Shanghai Stock Exchange.The People's Daily commentary said LSEG would not worry about Shanghai because it was fully aligned with China's priorities."As long as China goes up, Shanghai will rise," it said."Can Hong Kong do this? With ongoing violence and calls for independence, external markets will have worries [about Hong Kong]," the commentary said, arguing that the London operator's comments reflected the thinking of the foreign investment community. Hong Kong's bold bid for London Stock Exchange faces scrutiny of global regulators, adding kinks to its arduous approval processThe commentary comes amid criticism from China's official media of the anti-government movement in Hong Kong as a violent attempt to undermine "one country, two systems", and, in some cases, as a pro-independence push by some activists.But the People's Daily piece also said Hong Kong's importance as an offshore yuan trading hub, its rule of law, its role as a risk and wealth management centre and its place as one of the freest economies in the world meant it was irreplaceable for China.It said Beijing saw the city as a "core engine" in the country's Greater Bay Area plan to turn the country's southern region into an innovation hub on a par with Silicon Valley."However, some people in Hong Kong still have a negative attitude towards integrating into national development," it said."They cannot see the opportunities brought about by the development of the country and are even hostile to the development of mainland enterprises in Hong Kong. This is not only economically short-sighted but also politically narrow-minded." HKEX makes US$36.6 billion surprise bid to take over London Stock Exchange to grow into a global financial marketplaceFrench bank Natixis also issued a note of caution on Friday, saying that Hong Kong had evolved from a broad-based international financial centre to a mainland China-dominated offshore centre.It said the mainland's financial institutions and property developers were the most dependent on Hong Kong's capital markets for funds, followed by companies in health care, energy, infrastructure and utilities."The longer the political crisis remains unsolved, the more adverse its effect it will have on Hong Kong. And the grip of such turbulence could also spill over to mainland China, at least in the sectors which are heavily dependent on Hong Kong as a source of capital," Natixis said.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.

  • Financial Times

    London stock market is ailing and it deserves the kiss of life

    Helios Towers, operator of mobile masts in Africa, has dusted off old plans to list in London. Eight companies have floated on the Alternative Investment Market against 29 in the first eight months of 2018. The LSE is quick to point out the value of IPOs rose 35 per cent between January and July against the same period last year.

  • Bloomberg

    A Scathing London Stock Exchange Sends HKEX Packing

    (Bloomberg) -- The man who runs Hong Kong’s stock exchange compared his silent longing and sudden bid for its London counterpart to the tale of Romeo and Juliet. Unlike Shakespeare’s hero, Charles Li turned out to be an unwanted suitor.On Friday, London Stock Exchange Group Plc Chairman Don Robert released one of the more scathing rejections of a corporate takeover offer in recent British memory, issuing a laundry list of geopolitical and business reasons why the LSE finds Hong Kong Exchanges & Clearing Ltd.’s $36.8 billion bid wanting. Here are some of its many criticisms.There’s not enough cash in the bid, which is too low anyway.“Three-quarters of your proposed consideration is in HKEX shares, representing a fundamentally different and much less attractive investment proposition to our shareholders.“Even assuming your proposal were deliverable, its value falls substantially short of an appropriate valuation.”Hong Kong’s unrest makes that stock even less attractive.“We see the value of your share consideration as inherently uncertain. The ongoing situation in Hong Kong adds to this uncertainty. Furthermore, we question the sustainability of HKEX’s position as a strategic gateway in the longer term.”Then there’s HKEX’s unusual relationship with its government.“We are not a Chinese company,” Li said Wednesday. He even claimed “we are not even a Hong Kong company,” referring to its international aspirations. LSE begs to differ.“There is no doubt that your unusual board structure and your relationship with the Hong Kong government will complicate matters,” the LSE said.The Chinese territory’s government holds 6% of HKEX’s stock and appoints 6 of the 13 board members. The city’s chief executive -- a person appointed by Beijing -- picks HKEX’s chairman.That relationship will concern U.S. and other authorities.“Your proposal would be subject to full scrutiny from a number of financial regulators, as well as governmental entities under, for example, the U.K. Enterprise Act, the CFIUS [national security] process in the U.S., and the ‘golden powers’ regime in Italy,” the LSE said. “Your assertion that implementation of a transaction would be ‘swift and certain’ is simply not credible. We judge that the approval processes would be exhaustive and that support from relevant parties, vital for the transaction, is highly uncertain.”LSE already has a bridgehead in China: Shanghai.This “is our preferred and direct channel to access the many opportunities with China,” the LSE said.They worked long and hard to get it: the Shanghai exchange interlisting project dates to 2015, when former finance minister George Osborne traveled to China to court officials. After a long wait while LSE sought Chinese approvals, Huatai Securities Co. became the first Stock Connect listing in London in June.LSE doesn’t see the point of scrapping its Refinitiv deal.LSE wants the former Thomson Reuters financial and risk business to transform itself into a global force in data and trading platforms. Stock investors like the $27 billion proposal, which sent LSE shares surging even before HKEX came knocking.The Refinitiv move took “many months of strategy development, deep consideration and discussion,” the LSE said.HKEX hasn’t said much publicly about why it thinks Refinitiv is a bad move, but two people familiar with HKEX’s thinking have said choosing the Asian bourse’s deal instead would add to LSE’s profit more quickly. They also said a successfully completed Refinitiv deal would make LSE too big to buy.LSE also slammed HKEX’s own business as old-school.“The high geographic concentration and heavy exposure to market transaction volumes in your business would represent a significant backward step for LSEG strategically.”Robert ended the letter with a final dig. “Given the fundamental flaws in your proposal, we see no merit in further engagement.”\--With assistance from Aaron Kirchfeld and Viren Vaghela.To contact the reporter on this story: Keith Campbell in London at k.campbell@bloomberg.netTo contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Marion DakersFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Market Exclusive

    Market Morning: LSE Rebuffs Hong Kong, China US Ceasefire, Secret Cannabis Formula, ECB Printing Resumes

    London Stock Exchanges Rebuffs Hong Kong Hong Kong is in the news again, but this time not for rioting. The London Stock Exchange (OTCMKTS:LNSTY), which trades over the counter in the US, has rejected the preliminary $37 billion takeover bid from Hong Kong Exchanges and Clearing (OTCMKTS:HKXCY), and has also said that it has no interest […]The post Market Morning: LSE Rebuffs Hong Kong, China US Ceasefire, Secret Cannabis Formula, ECB Printing Resumes appeared first on Market Exclusive.

  • MarketWatch

    Hong Kong exchange says it wants to present rejected bid to LSE shareholders

    Hong Kong Exchanges and Clearing Limited said shareholders of the London Stock Exchange , "should have the opportunity to analyse in detail both transactions and will continue to engage with them," an indication it may go hostile with its nearly $37 billion bid. The LSE earlier on Friday rejected the offer and said it wasn't interested in talks. "The Board of HKEX had hoped to enter into a constructive dialogue with the Board of LSEG to discuss in detail the merits of its proposal and are disappointed that LSEG has declined to properly engage. In particular, HKEX had hoped to demonstrate why it believes that the benefits of its proposal significantly outweigh those of the proposed acquisition of Refinitiv," the exchange said.

  • Reuters

    HKEX to continue to engage with LSE shareholders after rebuff

    Hong Kong Exchanges and Clearing Ltd said it will continue to engage with the shareholders of London Stock Exchange Group after the London bourse emphatically rejected its $39 billion takeover offer on Friday. "The Board of HKEX had hoped to enter into a constructive dialogue with the Board of LSE to discuss in detail the merits of its proposal and are disappointed that LSE has declined to properly engage," the Hong Kong Exchange said.

  • Bloomberg

    Can London’s Great Wall Against Hong Kong Hold?

    (Bloomberg Opinion) -- Hong Kong Stock Exchanges & Clearing Ltd.’s tilt at London Stock Exchange Group Plc has achieved one thing: It has extracted a helpful checklist of requirements for any other would-be buyer of the venerable U.K. exchange. Hong Kong will struggle to address all of the concerns London set out on Friday – but it’s too early to say for certain it will fail.  It could always throw money at the problem.The LSE has firmly rejected Hong Kong’s proposal even as a basis for discussion. It notes regulatory approval for a deal is highly uncertain and there would probably be scant clarity in the next few months. To pursue a deal that might never materialize, LSE would have to ditch its planned takeover of data provider Refinitiv (which competes with Bloomberg LP, the parent of Bloomberg News). As things stand, the bird in the bush is worth less than the bird in the hand.LSE also questions the fundamental strategic selling point of the Hong Kong tie-up – that it provides a conduit for Chinese deposits to enter the global capital markets. It would rather tap that opportunity directly, citing its own recent tie-up with the Shanghai Stock Exchange. Merging with HKEX would be to double down in conventional share trading and there are other ways to access China.How the combined business would be controlled – in particular the government of Hong Kong’s right to appoint the chairman and approve five directors – is unacceptable in London.Some, but not all, of these non-financial issues can be addressed. Regulatory uncertainty is somewhat circular: it would diminish if the LSE was onside and working in partnership for clearance. In theory, Hong Kong could reform its board to make its oversight independent of government. But in practice?As for the strategy, HKEX is what it is. The future status of Hong Kong as a financial center is hard to predict amid the recent unrest.To the extent Hong Kong is unable to resolve all these concerns directly, it still has the option of offering a stupidly high price in mitigation. That would put incredible pressure to on the LSE to enter talks.So far, HKEX hasn’t done that. Its part-cash, part-stock offer is worth about 82 pounds ($102) a LSE share based on the most recent closing price. That is less than what the LSE thinks it will be worth after buying Refinitiv. The U.K. bourse won't put a number on itself, but analysts at Berenberg reckon that the combination would be worth 83 pounds a share.Hong Kong could certainly afford to add more cash to its proposal. But it needs to keep combined leverage modest, and certainly lower than what the LSE would have after buying Refinitiv. Given the systemic importance of the exchange, it will be easier to get regulatory approval if it is clear the combined company’s balance sheet is strong.Many LSE holders will discount the value of Hong Kong-listed shares, which they may not be able to own. Perhaps Hong Kong can get round this by simply chucking in even more stock or by raising cash locally through a share sale.Price can overcome a lot – but not everything. The politics of this situation are highly charged, and they will probably settle the matter.To contact the author of this story: Chris Hughes at chughes89@bloomberg.netTo contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • LSE Rejects Hong Kong Exchange’s Surprise $36.6 Billion Bid
    Bloomberg

    LSE Rejects Hong Kong Exchange’s Surprise $36.6 Billion Bid

    (Bloomberg) -- London Stock Exchange Group Plc has rejected a takeover proposal from Asian rival Hong Kong Exchanges & Clearing Ltd., saying the bid has “fundamental flaws.”The board of the British bourse, which is working on its own deal to buy data provider Refinitiv, said HKEX’s approach on Wednesday had problems in its “strategy, deliverability, form of consideration and value.”“Your assertion that implementation of a transaction would be ‘swift and certain’ is simply not credible,” the firm said in a statement Friday. “Given the fundamental flaws in your proposal, we see no merit in further engagement.”HKEX intends to continue its pursuit of the deal, according to Financial News. The firm previously said that its takeover would only happen if the LSE dropped its combination with Refinitiv -- and that it could go hostile if the business resisted its plans to build an Anglo-Asian markets giant.LSE published a letter to HKEX raising concerns including:Potential regulatory issues in both the U.K., United States and ItalyThe firm’s existing partnership with the Shanghai Stock Exchange, “which is our preferred and direct channel to access the many opportunities with China”Joining the business with that of HKEX, with its heavy exposure to market transaction volumes, “would represent a significant backward step”The “inherently uncertain” value of the stock portion of the takeover, particularly given the political climate in Hong Kong.Shares in the LSE were up 2.8% to 7,454 pence in afternoon trading in London, compared with HKEX’s 8,361 pence per share offer. The shares initially rose as much as 16% on Wednesday after HKEX said it wanted to combine the exchanges in a cash-and-stock deal that valued the London firm at 29.6 billion pounds ($36.9 billion). However, the stock pared gains after analysts poured cold water on the deal and top investors raised doubts about its attractiveness compared to the Refinitiv acquisition.“I don’t expect HKEX to walk away without trying more,” said Massimo Stabilini, a former Paulson & Co. executive who now runs his own hedge fund, Sinclair Capital. “I expect them to come back with a better offer and with a higher cash component.”The British government has the power to scrap the deal on public-interest grounds. On Wednesday it said LSE is a “critically important part of the U.K. financial system” and that it would be closely scrutinizing details of the transaction.Both firms have been involved in exchange merger deals in recent years, with LSE failing in its most recent attempt two years ago to combine with Deutsche Boerse AG. HKEX acquired London Metal Exchange in 2012 for 1.4 billion pounds.LSE Chief Executive Officer David Schwimmer also has experience of stock exchange deals: in his previous role at Goldman Sachs Group Inc., he was one of the main architects of the combination of the New York Stock Exchange and Archipelago Holdings Inc. over a decade ago.(Adds report of HKEX response in fourth paragraph, background in tenth.)\--With assistance from Nishant Kumar.To contact the reporter on this story: Viren Vaghela in London at vvaghela1@bloomberg.netTo contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Marion Dakers, Keith CampbellFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Hong Kong exchange vows to press on with $39 billion LSE bid after rebuff
    Reuters

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

    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 on Friday. 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 U.S. 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.

  • Reuters

    UPDATE 6-Hong Kong exchange vows to press on with $39 bln LSE bid after rebuff

    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 on Friday. 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 U.S. 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.

  • MarketWatch

    LSE rejects Hong Kong bid and says it doesn't want to hold merger talks

    The London Stock Exchange on Friday rejected the preliminary, 29.6 billion pound ($37 billion) takeover bid from the Hong Kong Exchanges and Clearing and said it didn't want to engage in talks. "The Board has fundamental concerns about the key aspects of the Conditional Proposal: strategy, deliverability, form of consideration and value. Accordingly, the Board unanimously rejects the Conditional Proposal and, given its fundamental flaws, sees no merit in further engagement," the LSE said. LSE shares were last up 1.3% at 7344 pence.

  • South China Morning Post

    London Stock Exchange strongly rejects Hong Kong's US$36.6 billion surprise takeover bid, says Shanghai is 'preferred' partner

    The London Stock Exchange has rebuffed Hong Kong's unsolicited takeover bid in a strongly worded letter and separate website post spelling out its concerns about the "fundamental flaws" of the plan, which included the current political crisis engulfing the city.The UK bourse's board of directors said it had unanimously rejected the US$36.6 billion proposal from Hong Kong Exchanges and Clearing, which surprised the market when it was announced earlier this week.In a letter to the chairman and chief executive of Hong Kong Exchanges and Clearing, LSE chairman Don Robert pulled no punches, making clear his preference for Shanghai over Hong Kong as a strategic partner."We do not believe HKEX provides us with the best long-term positioning in Asia or the best listing/ trading platform for China. We value our mutually beneficial partnership with the Shanghai Stock Exchange which is our preferred and direct channel to access the many opportunities with China," it said.He was referring to LSE's existing stock connect scheme with Shanghai Stock Exchange, which he said gives it direct access to China.A statement posted on the LSE website on Friday said: "The board has fundamental concerns about the key aspects of the conditional proposal: strategy, deliverability, form of consideration and value," said a statement posted on the LSE website on Friday, just two days after the local bourse made the unexpected offer."Accordingly, the board unanimously rejects the conditional proposal and, given its fundamental flaws, sees no merit in further engagement." HKEX makes US$36.6 billion surprise bid to take over London Stock ExchangeRobert's letter to his HKEX counterpart, Laura Cha Shih May-lung, and chief executive Charles Li Xiaojia, set out the reasons for the rejection and expressed dismay at HKEX's conduct."We were very surprised and disappointed that you decided to publish your unsolicited proposal within two days of our receiving it," Robert said in the letter, referring to the "highly conditional proposal" made in private by the HKEX on Monday.The HKEX, which operate the third-largest capital market in Asia, responded in a statement late on Friday, saying it was disappointed the LSE had "declined to properly engage"."In particular, HKEX had hoped to demonstrate why it believes that the benefits of its proposal significantly outweigh those of the proposed acquisition of Refinitiv," it said, adding that it would continue to "engage with shareholders".It revealed its shock bid on Wednesday, offering to pay £83.61 per LSE share in cash and stock for the London bourse operator, which valued it at £29.6 billion (US$36.6 billion).It was the highest ever takeover offer for a stock exchange, and included a demand that the LSE would need to give up its own US$27 billion acquisition of the financial data provider Refinitiv, announced on August 1.The LSE board said it considered the offer to be undervalued and would stick to its plan to pursue the deal with Refinitiv, which is expected to be completed in the second half of next year."We do not see strategic merit for LSEG (London Stock Exchange Group) in your proposed transaction," Robert said. "We recognise the scale of the opportunity in China and value greatly our relationships there. However, we do not believe HKEX provides us with the best long-term positioning in Asia or the best listing /trading platform for China."The rejection was also because the LSE considers HKEX shares to be "unattractive". The offer took the form of 25 per cent in cash and 75 per cent in new shares."We see the value of your share consideration as inherently uncertain. The ongoing situation in Hong Kong adds to this uncertainty," he said. The city has faced unprecedented anti-government protests since June 9 that have shaken confidence in its standing as a global financial hub."Furthermore, we question the sustainability of HKEX's position as a strategic gateway in the longer term. The Hong Kong concentration and core characteristics of your business, together with your Hong Kong domicile and listing, present an additional set of difficulties," the LSE chairman said.HKEX would have needed to get approval from a number of regulators in the UK, US, and Italy for the takeover to go ahead.The Hong Kong government is the largest shareholder in HKEX with a 6 per cent stake, and it appoints half of the board members. This would "complicate matters" and "pose a serious risk for our shareholders," Robert said.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.

  • Hong Kong Exchange’s China Ties May Backfire in LSE Quest
    Bloomberg

    Hong Kong Exchange’s China Ties May Backfire in LSE Quest

    (Bloomberg) -- When Hong Kong Exchanges & Clearing Ltd. bought the London Metal Exchange in 2012, the access it offered to the Chinese market was a big plus.But with questions mounting over Beijing’s role in Hong Kong affairs, those ties now represent a threat to HKEX’s 29.6 billion-pound ($36.6 billion) bid for the London Stock Exchange Group Plc.It’s an unfamiliar position for the corporate leaders who have made their drama-free links to Beijing key to their international appeal. Amid the U.S. trade war and scrutiny over China’s role in Hong Kong’s social unrest, the connections are emerging as a commercial handicap. Further complicating HKEX Chief Executive Officer Charles Li’s audacious offer is the $27 billion deal LSE made in July for data provider Refinitiv. Scrapping that is a condition of HKEX’s bid.“LSE is at the center of Britain’s financial market,” said Cecelia Zhong, CEO of Guojin Resources Ltd. and a former HKEX executive. “As it is busy focusing on its own data deal right now, the last thing LSE wants to consider is foreign ownership, particularly a Chinese player to control it.”The Hong Kong government, which owns 6% of HKEX, appoints six out of the company’s 13 board members, and the city’s chief executive -- a person appointed by Beijing -- picks the company’s chairman. The structure means the exchange operator comes under a level of political oversight unusual among other developed market bourses.Other Hong Kong companies have faced similar challenges even before the protests exploded earlier this year into the biggest crisis in Hong Kong since the city’s return to China in 1997.Deals VetoedIn November, Australia rejected a A$13 billion ($9 billion) gas project bid by Hong Kong tycoon Victor Li’s CK Infrastructure Holdings Ltd., calling it contrary to national interest. The decision followed a torrent of criticism in Australia that Hong Kong companies were just as susceptible to Beijing’s influence as those on the mainland. U.S. regulators last year rejected a bid by a Chinese-linked consortium to take over the Chicago Stock Exchange, a deal that then-candidate Donald Trump blasted when it was announced in 2016.The unrest also put unwelcome pressure on Hong Kong companies, particularly Cathay Pacific Airways Ltd., which faced a heavy backlash from China in the wake of its employees joining protests.About a month ago, China’s civil aviation authority began clamping down on Cathay, prompting the carrier to fire staff and threaten to terminate workers for even supporting the demonstrations -- let alone participating in them. Both the airline’s chief executive officer and chairman have since announced their resignations.“What we’ve seen with the Cathay Pacific example is that there is, whether direct or indirect, influence and pressure on Hong Kong companies, which I think some hoped was not necessarily there,” said Fraser Howie, who has two decades of experience in China’s financial markets and co-wrote the 2010 book “Red Capitalism.”China told its biggest state-run firms to take control of Hong Kong companies, Reuters reported Friday, a move that could further fuel concern that the mainland is stepping up efforts to play a bigger role in the former British colony. ‘British Institution’In a call with reporters on Wednesday, Li was asked about fears over China’s influence, and referred to the LME takeover. He recalled comments at the time that the deal would amount to a Chinese takeover -- concerns that haven’t borne out, he said.“We do not have Chinese management at all in the London Metal Exchange,” he said. “If you walk onto the floor, you will see a quintessential British institution.”HKEX shares fell 3.5% in Hong Kong on Thursday, and rose 1.3% Friday. LSE is trading at about 14% below the offer price, highlighting skepticism that a deal will get done. A statement from the London bourse called Wednesday’s offer an “unsolicited, preliminary and highly conditional proposal.” LSE was set to spurn the offer, people familiar with the matter said.LSE’s effort to complete its purchase of Refinitiv, the business that used to be Thomson Reuters Corp.’s financial and risk unit, is a big reason why HKEX’s bid is unlikely to succeed, said Jonas Short, head of the Beijing office at Everbright Sun Hung Kai Securities. Likewise, LSE shareholders including Jupiter Asset Management and Aberdeen Standard Investments indicated they prefer the British bourse’s planned takeover of Refinitiv -- a strategic move to expand in data that HKEX wants to scrap.Commercial strategy notwithstanding, the British government has the power to scrap the deal on public-interest grounds. “The London Stock Exchange is a critically important part of the U.K. financial system, so as you would expect, the government and the regulators will be looking at the details closely,” said a spokesperson for the U.K. government on Wednesday.Not all acquisitions involve strategic assets. Victor Li’s CK Asset Holdings Ltd.’s agreed to pay 2.7 billion pounds ($3.3 billion) for Greene King Plc, which operates more than 2,700 British bars, restaurants and hotels.Still, Brock Silvers, managing director at Kaiyuan Capital, said the heightened scrutiny on Chinese entities won’t recede even after an end to the trade war, and it’s almost certain, he said, that HKEX will be viewed as a Chinese company.“An eventual deal would expose LSE to a variety of Chinese corporates and government entities, and some of those relationships could be highly problematic from political, compliance, or know-your-customer perspectives,” he said.(Adds details of Reuters report in 11th paragraph)\--With assistance from Alfred Liu, Lucille Liu and Benjamin Robertson.To contact Bloomberg News staff for this story: Kiuyan Wong in Hong Kong at kwong739@bloomberg.net;Evelyn Yu in Shanghai at yyu263@bloomberg.netTo contact the editors responsible for this story: Candice Zachariahs at czachariahs2@bloomberg.net, James Hertling, Sam MamudiFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • TheStreet.com

    London Stock Exchange Rejects 'Flawed' $39 Billion Hong Kong Takeover Bid

    The London Stock Exchange Group rejected a near $40 billion takeover offer from the Hong Kong Exchanges and Clearing Limited Friday, calling the approach "fundamentally flawed" and one that "significantly undervalues" the Lonon-based exchange operator.

  • Financial Times

    HKEX undeterred by LSE rebuff for £32bn takeover bid

    Hong Kong Exchanges and Clearing has vowed to press on with its £32bn takeover bid for the London Stock Exchange, even as the UK group flatly rejected the unsolicited approach. , value and structure of the offer and questioned whether its Asian rival could sustain its position as a “strategic gateway” to China in the face of competition from Shenzhen and Shanghai. The Hong Kong exchange retorted that it was disappointed that the London exchange’s board had “declined to properly engage” and would press its case with shareholders.

  • Benzinga

    Skepticism Surrounds Proposed Hong Kong-London Stock Exchange Deal

    The London Stock Exchange appears to be set on rejecting the unsolicited offer, which was confusing in the first place, Bloomberg's Jan-Henrik Foerster said on "Bloomberg Surveillance" Thursday. The offer comes at a time when the streets of Hong Kong are filled with protesters, while London is in political turmoil related to Brexit.