Published: Wed, September 11, 2019
Markets | By Otis Pena

HK exchange makes £32B bid for LSE

HK exchange makes £32B bid for LSE

The Hong Kong stock exchange has tabled an audacious £30bn bid for the London Stock Exchange that has sent shockwaves through financial markets, and could pose a political headache for the Government.

Shares in the London Stock Exchange (LSE) surged 10% higher after its Hong Kong rival revealed the cash-and-shares approach.

The LSE, which agreed to snap up data provider Refinitiv in a $27 billion blockbuster deal just weeks ago, declined to comment.

Richard Hunter, head of markets at Interactive Investor, said: "The proposed offer would be totemic in terms of East-West relations and the complementary strengths of the two exchanges would make strategic sense".

The takeover bid by the Hong Kong company comes as Britain is set to leave the European Union, a step some politicians fear could weaken its large financial sector.

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Update A statement issued by the LSEG notes the "unsolicited, preliminary and highly conditional" proposal to acquire the entire share capital of LSEG.

HKEX was created in 2000 after the merger of stock and derivatives exchanges in Hong Kong. As such, and not surprisingly, it will throw out a number of questions rather than answers at this stage'.

"The London Stock Exchange has historically fought off approaches from overseas, preferring instead to be the acquirer", Hunter said, adding that the merger would also raise "political questions" both in terms of historical considerations and the ongoing trade dispute between China and the United States.

LSE's board said it would consider the proposal and will make a further announcement in due course.

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