HKEX Drops $39.3 Billion Bid to Takeover LSEG

The Hong Kong exchange had received resistance from the London exchange Group.

The Hong Kong Exchanges and Clearing Limited (HKEX) announced this Tuesday that it has dropped its unsolicited offer of £32 billion ($39.3 billion) for the London Stock Exchange Group plc (LSEG).

Specifically, HKEX confirmed that it does not intend to make an offer for LSEG; however, the Board of the company still believes that the merger between LSEG and HKEX is “strategically compelling and would create a world-leading market infrastructure group.”

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HKEX received frosty reception from LSEG

Today’s announcement follows on from a rather hostile response from LSEG regarding the takeover. As Finance Magnates reported, the London exchange rejected the Hong Kong Group’s offer.

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In particular, LSEG had said that the Hong Kong Group’s offer was too low and that the exchange doesn’t provide LSEG with the best long-term positioning in Asia or the best listing/trading platform for China.

Takeover endangered LSEG’s Refinitiv acquisition

In addition, as Finance Magnates highlighted, the proposal from HKEX threatened to ruin LSE’s own plan to buy data and analytics company Refinitiv, a deal that is worth $27 billion. In order for the purchase to go ahead, the Hong Kong exchange had said the LSE would have to ditch the Refinitiv purchase.

“Despite engagement with a broad set of regulators and extensive shareholder engagement, the Board of HKEX is disappointed that it has been unable to engage with the management of LSEG in realising this vision, and as a consequence has decided it is not in the best interests of HKEX shareholders to pursue this proposal,” the statement released today said.

Following the bid from HKEX, the London Group started fortifying its advisory board to prepare for a potential hostile takeover. Last month, the company recruited two bankers from JPMorgan to join its roster of advisers – Dwayne Lysaght, the co-head of mergers and acquisitions in Europe, the Middle East, and Africa, and Edmund Byers, co-head of its UK business.

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