HONG KONG – Hong Kong Thursday made a surprise buyout of 30\nbillion pounds ($37 billion) to the London Stock Exchange.<\/p>\n\n\n\n
The Hong Kong Stock Exchange said on Wednesday it had\nsubmitted an offer to the London Stock Exchange LSE (LNSTY) to bring the two\ncompanies together in a cash and stock deal worth \u00a329.6 billion or \u00a3 31.6\nbillion ($39 billion) including debt.<\/p>\n\n\n\n
If this happens, the acquisition will create the world’s\nthird largest stock exchange group behind the New York Stock Exchange and\nNasdaq in terms of the value of listed companies.<\/p>\n\n\n\n
It will also be the largest foreign acquisition of a listed\ncompany in the UK since TAK acquired Shire in 2018.<\/p>\n\n\n\n
Hong Kong Chief Executive Charles Lee told reporters at a\nconference call that the deal “redefine global capital markets for decades\nto come,” This will strengthen Hong Kong’s position as the main link\nbetween mainland China, Asia and the rest of the world.<\/p>\n\n\n\n
However, there are plenty of obstacles to be faced here.\nHong Kong’s offer comes at a politically sensitive time. The uncertainty of\nBrexit casts a shadow over London’s role as a global financial center.\nMeanwhile, Hong Kong – Asia’s No. 1 financial center – has been shaken by\nmonths of pro-democracy protests sparked by fears that Beijing is tightening\nits grip on the city.<\/p>\n\n\n\n
The Hong Kong government supports seven of the 13 stock\nmarket managers, including the CEO, according to its website. In addition, the\nPresident’s appointment is subject to the approval of Hong Kong Chief Executive\nCarrie Lam.<\/p>\n\n\n\n
Analysts at Bernberg said the deal would give Hong Kong\ncontrol of the stock markets in the UK and Italy, as well as the main\ninfrastructure of European debt markets, and thus face “elevated political\nrisks.”<\/p>\n\n\n\n
“The London Stock Exchange is a critically important\npart of the UK financial system, so as you would expect, the government and the\nregulators will be looking at the details closely,” a government\nspokesperson said.<\/p>\n\n\n\n
The offer is also conditional on the London Stock Exchange\nending the proposed acquisition of Refinitiv, which was announced last month.\nThe \u00a322bn ($27bn) deal aims to turn the London Stock Exchange into a global\nmarkets giant to rival Michael Bloomberg.<\/p>\n\n\n\n
In a statement, LSE described Hong Kong’s offer as “unsolicited.”\nThey would consider the proposal but confirmed their commitment to the\nRefinitiv deal.<\/p>\n\n\n\n
LSE shares rose as much as 11% on the news show in Hong\nKong, before cutting those gains slightly.<\/p>\n\n\n\n
“We express our admiration for the City of London and\nLSE for giving all stakeholders the opportunity to openly evaluate our\ntransactions and conclude that it is a convincing deal,” LSE told\nreporters.<\/p>\n\n\n\n
James Fok, head of HKEX strategy, said the deal was about\n“connecting the plumbing” between the two markets, giving investors\nand exporters access to a larger pool of capital.<\/p>\n\n\n\n
HKEX had to overcome political objections to its takeover of\nthe London Metal Exchange in 2012. Since then, it \u201cinvested heavily in the UK,\ncreated a lot of jobs and paid a lot of taxes,\u201d and the London Metal Exchange\nhas remained a “quintessential British institution,\u201d<\/p>\n\n\n\n
HKEX said it will seek a secondary listing on the London\nStock Exchange after the deal is completed to reflect its commitment to the UK.<\/p>\n","protected":false},"excerpt":{"rendered":"
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