London Stock Exchange stresses commitment to Refinitiv deal after HKEX drops acquisition plans

Following an announcement by Hong Kong Exchanges and Clearing Limited (HKEX) that it would not proceed with an offer for London Stock Exchange Group plc, LSEG has posted a brief statement regarding HKEX’s stance.

The Board of LSEG simply noted the announcement made by HKEX that it does not intend to make an offer for LSEG.

LSEG stressed that it remains committed to and continues to make good progress on its proposed acquisition of Refinitiv, a provider of data, analytics, trading, and risk assessment tools. Regulatory approval processes are underway. LSEG said, and shareholder approval for the transaction is expected to be sought at an Extraordinary General Meeting in November 2019. The transaction remains on track to close in the second half of 2020.

Let’s recall that LSEG agreed and announced the acquisition of Refinitiv on August 1, 2019. The Exchange views the deal as a transformational transaction, strategically and financially. The combined global business will be headquartered and domiciled in the UK with a premium listing in London.

The financial and strategic logic of the Refinitiv transaction has been exceptionally well received, according to LSEG. In an announcement issued on September 13, 2019, rejecting HKEX’s proposal, LSEG said that, since the Refinitiv announcement, the LSEG share price is up approximately 29%, a value increase of circa £5.8 billion. There is positive market sentiment about the potential for further value creation for the enlarged group and the Board is confident that significantly greater value can be achieved.

Back then, LSEG noted that three-quarters of the proposed consideration is in HKEX shares, representing a fundamentally different and much less attractive investment proposition to LSEG shareholders, as LSEG sees the value of HKEX share consideration as inherently uncertain.