London Stock Exchange to consider HKEX’s “preliminary and highly conditional” acquisition bid

Maria Nikolova

The Board of LSEG says it will consider HKEX’s proposal which it called “unsolicited, preliminary and highly conditional”.

About an hour after Hong Kong Exchanges and Clearing Limited (HKEX) said it made a proposal to acquire the entire share capital of London Stock Exchange Group plc (LSEG), the Board of LSEG posted a brief comment regarding the proposal.

The Board of LSEG noted the announcement from HKEX and confirmed that HKEX made an “unsolicited, preliminary and highly conditional proposal” to acquire all of the share capital of LSEG.

The Board of LSEG says it will consider this proposal and will make a further announcement in due course.

LSEG remains committed to and continues to make good progress on its proposed acquisition of Refinitiv Holdings Ltd as announced in August 2019. A circular is expected to be posted to LSEG shareholders in November 2019 to seek their approval of the transaction.

Under the terms of the proposed transaction, LSEG shareholders would receive 2,045 pence in cash and 2.495 newly issued HKEX shares per LSEG share.

The Proposed Transaction implies a value for each LSEG share of c. 8,361 pence. This would imply a value for the entire issued and to be issued ordinary share capital of LSEG of approximately £29.6 billion, implying an enterprise value of £31.6 billion (inclusive of net debt and other adjustments of approximately £2.0 billion as at 30 June 2019)1. The offer represents:

  • a premium of 22.9% to the closing share price of 6,804 pence per LSEG share on 10 September 2019;
  • a premium of 22.4% to the volume weighted average closing price of 6,833 pence per LSEG share since 29 July 2019, the first trading date after the first announcement of the Refinitiv transaction, to 10 September 2019;
  • a premium of 47.4% to the closing price of 5,672 pence per LSEG share on 26 July 2019, the last trading date before the first announcement of the Refinitiv transaction; and
  • a multiple of 30.2x times 2018 reported earnings before interest, tax, depreciation, amortisation and impairments.

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