Hong Kong is sweetening the offer for the London Stock Exchange

Hong Kong Exchanges and Clearing is prepared to sweeten the terms of its £32 billion offer for the London Stock Exchange Group… after it received a cool reception from shareholders and the UK bourse. The Hong Kong company is “open to considering” a higher element of cash in its offer, which is made up largely of HKEX shares… HKEX shares dropped 3.5 per cent yesterday. The LSE, which struck its own blockbuster deal just last month with the $27 billion acquisition of data and trading company Refinitiv, described the offer from HKEX as “unsolicited, preliminary and highly conditional”. HKEX will make no changes to its offer until the LSE responds to its original proposal. However, the offer is expected to be formally rejected by the LSE in coming days. HKEX is seeking to gatecrash LSE’s purchase of Refinitiv at a time of political upheaval in Hong-Kong and continued convulsions over Brexit in the UK. Charles Li, HKEX’s longstanding chief executive, has argued that his proposal is superior to the Refintiv deal because it will allow the combined group to benefit from the growing links between China’s capital markets and the rest of the world… The Hong Kong bourse has three months to convince LSE’s board and shareholders — the largest of which is Qatar — to ditch the Refinitiv deal.

Philip Stafford and Patrick Jenkins