Hong Kong’s pursuit of the London Stock Exchange ends in tears

FEW BOURSES have been wooed as often as the London Stock Exchange Group (LSE). It has been the target of a bid every two and a half years on average since going public in 2000, according to Berenberg, a bank. All have failed, including the latest, a £32bn ($39bn) offer from Hong Kong Exchanges and Clearing (HKEX) in September that would have created the world’s second-largest exchange group by market value (behind America’s CME Group). On October 8th HKEX called the whole thing off.

Charles Li, HKEX’s boss, styled himself as a Romeo to the LSE’s Juliet, and held out the prospect of a tie-up between East and West. HKEX is China’s main gateway to Western capital markets. It offered a 23% premium to the LSE’s share price. But the LSE’s shareholders wanted more, and a greater share of cash, at which point HKEX’s shareholders reportedly balked.

HKEX’s management had been planning a run at the LSE for about a year, but delayed it because of Brexit uncertainty. Then their hand was forced. In August the LSE had said it would buy Refinitiv, a data conglomerate, for $27bn. Though the timing was terrible, with protests roiling Hong Kong and an escalating trade war between America and China, HKEX realised it was now or never.

The LSE will now return to its original plan of buying Refinitiv. That will probably leave it too...



via The Economist: Finance and economics Business Feeds

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