HKEX scraps $285.86b bid for London bourse

LSE’s board had unanimously rejected the proposal on 13 September.

The Hong Kong Exchanges and Clearing Limited (HKEX) has decided not to proceed with its proposal to buy the London Stock Exchange (LSE), announced HKEX.

The announcement came almost a month after HKEX expressed its intention to merge the two bourses and create “a world-leading market infrastructure group” through the merger amounting to $285.86b.

HKEX chief executive Charles Li expressed disappointment on the decision, citing the “level of engagement from LSE” to have led HKEX to withdraw the offer.

“We still believe the strategic rationale for the combination of our two businesses is compelling and would create a world-leading market infrastructure group. However, despite a huge amount of work and discussions with a broad set of regulators and extensive shareholder discussions, the level of engagement from LSE led us to conclude that the continued pursuit of a combination of the two businesses would not be in the best interests of our own shareholders,” Li stated in an HKEX blog post.

LSE’s board unanimously rejected the conditional proposal on 13 September, where they reiterated their commitment to its proposed acquisition of Refinitiv. LSE also raised concerns about aspects of the proposal as well as HKEX’s structure.

“We do not see strategic merit for LSEG in your proposed transaction,” LSE said in the letter addressed to HKEX. “...The high geographic concentration and heavy exposure to market transaction volumes in your business would represent a significant backward step for LSEG strategically.”

The rejection led HKEX to embark on a three-week journey in an attempt to keep the offer alive, which included a plan to raise the bid price.

Photo courtesy of Wikimedia Commons.