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London Stock Exchange refuses Hong Kong merger plan

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London Stock Exchange refuses Hong Kong merger plan
September 17
09:00 2019

The Board of Directors of the London Stock Exchange rejected the offer of the Hong Kong Stock Exchange to merge. The difficult situation in Hong Kong caused such a decision.

In addition to canceling the transaction, London Stock Exchange Group made another statement. They officially announced about the purchase of the financial information provider Refinitiv Holdings. The transaction will be closed next year.

According to one version, management of LSE.L was not embarrassed by the policy. They were not satisfied with the price. Earlier there was the information in the media that the owner of HKEX was ready to offer a higher price, but at first they wanted to get an answer to the current offer.

The proposal was made on the eleventh day of the month. HKEX proposed the London shareholders 20.4 pounds per share, plus 2.5 shares of the Hong Kong Stock Exchange. In total, they were ready to pay 83.6 pounds for 1 LSEG share. As of September 10, the amount of this transaction would be almost 30 billion pounds, or 36.5 billion US dollars.

When this news appeared on Thursday, the securities of the Hong Kong Stock Exchange lost 3.5%. On Friday, they climbed up nearly 1.5%.

On Thursday, the media reported that official London was unlikely to allow a deal of this kind, since the London Stock Exchange is too important for the global financial structure.

In addition to the permission from the UK government, HKEX would need the approval of the US regulators.

Hong Kong Exchange is a major financial operator in the stock market and the market for other assets. In 2012, it became the owner of the London Metal Exchange. HKEX paid 1.4 billion pounds for the purchase.


The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group

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