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Hong Kong drops £32bn bid for London Stock Exchange | Hong Kong drops £32bn bid for London Stock Exchange |
(about 2 hours later) | |
Hong Kong's stock exchange has dropped its multibillion-dollar bid for the prized London Stock Exchange (LSE). | Hong Kong's stock exchange has dropped its multibillion-dollar bid for the prized London Stock Exchange (LSE). |
The bid was worth £32bn ($40bn) and was dependent on the axing of the London exchange's planned purchase of US financial data provider Refinitiv. | The bid was worth £32bn ($40bn) and was dependent on the axing of the London exchange's planned purchase of US financial data provider Refinitiv. |
But the LSE had rejected the offer, saying it fell "substantially short" of an appropriate valuation. | But the LSE had rejected the offer, saying it fell "substantially short" of an appropriate valuation. |
Hong Kong Exchanges and Clearing (HKEX) said it was now in the interest of shareholders to drop the bid. | Hong Kong Exchanges and Clearing (HKEX) said it was now in the interest of shareholders to drop the bid. |
In a statement, the board said it still believed a tie-up was "strategically compelling" and "would create a world-leading market infrastructure group". | In a statement, the board said it still believed a tie-up was "strategically compelling" and "would create a world-leading market infrastructure group". |
HKEX had until Wednesday to follow up its initial takeover proposal with a firm bid. | HKEX had until Wednesday to follow up its initial takeover proposal with a firm bid. |
Under UK rules, it is not allowed to make another approach for the LSE for six months. | Under UK rules, it is not allowed to make another approach for the LSE for six months. |
"The board of HKEX is disappointed that it has been unable to engage with the management of LSEG in realising this vision," it said in a statement. | "The board of HKEX is disappointed that it has been unable to engage with the management of LSEG in realising this vision," it said in a statement. |
Shares in LSE dropped 6% in reaction to the news. | |
The LSE's board rejected the bid unanimously last month and said it saw "no merit in further engagement". | The LSE's board rejected the bid unanimously last month and said it saw "no merit in further engagement". |
In a published letter sent to HKEX, the LSE said the bid was "inherently uncertain" because it was mostly in shares, and also because of Hong Kong's questionable future as a strategic gateway. | In a published letter sent to HKEX, the LSE said the bid was "inherently uncertain" because it was mostly in shares, and also because of Hong Kong's questionable future as a strategic gateway. |
Neil Wilson, chief market analyst at Markets.com, said investors had "balked at the anti-trust, regulatory and deliverability issues that the tie up implied". | |
However, he added: "We're slightly surprised HKEX didn't try again - the fact they didn't suggests their charms... were completely lost on the big shareholders. | |
"[LSE] shares slipped... on the open, but what remains unclear is whether one of the large US exchanges comes in." |
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