Hong Kong Exchanges and Clearing said the deal would allow the London Stock Exchange to monetise market data in China and help London connect to China’s fast-growing domestic capital market.
Hong Kong Exchanges and Clearing (HKEX) has made a $37 billion bid for the London Stock Exchange (LSE) in a proposed merger described as «a highly compelling strategic opportunity to create a global market infrastructure leader,» according to a statement issued by the bourse on Wednesday.
HKEX said the merger would bring «significant synergies,» including incorporating LSE's technology to its trading and clearing platforms, increased revenues from cross-selling and innovation opportunities, and lower capital expenditures in connection with existing systems and future investment plans.
In its offer document, HKEX valued each LSE share at £83.61, a 22.9 percent premium to its closing price on 10 September. It is offering £20.45 in cash and 2.495 newly issued HKEX shares for each share.
«A combined group will be strongly placed to benefit from the dynamic and evolving macroeconomic landscape, whilst enhancing the longterm resilience and relevance of London and Hong Kong as global financial centres,» Charles Li, HKEX chief executive, said.
Critical Time
The bid comes at a critical time, with LSE in the middle of its own $27 billion bid for financial markets data and infrastructure provider Refinitiv, owned by Blackstone and Thomson Reuters. The purchase is awaiting shareholder approval, but a HKEX takeover would derail the deal.
LSE chief executive David Schwimmer said it would consider the offer, though it was «preliminary and highly conditional,» «Financial Times» reported.
The newspaper also said the bid faces rejection as people briefed on the offer expressed doubts about political risk and deal structure.
If the deal goes through, it won't be HKEX's first acquisition of a major London financial institution – the bourse currently runs the London Metal Exchange, which it purchased 2012 for £1.4 billion in 2012.
