‘Flawed’ bid for LSE rejected

THE London Stock Exchange Group (LSE) has rebuffed the £31.6billion bid from its Hong Kong rival in a blistering rejection that branded the approach “fundamentally flawed”.

The LSE board unanimously rejected the proposed takeover from Hong Kong Exchanges and Clearing (HKEX) and said it saw “no merit” in holding talks with the suitor. The LSE also said the £83.61 a share price “falls substantially short”.

The LSE said: “The board has fundamental concerns about the key aspects of the conditional proposal: strategy, deliverability, form of consideration and value. Accordingly, the board unanimously rejects the conditional proposal and, given its fundamental flaws, sees no merit in further engagement.”

Its withering put-down comes after HKEX launched its surprise cash-andshares takeover bid on Wednesday in a move set to disrupt the LSE’s planned $27billion (£21.9billion) deal to buy data provider Refinitiv.

HKEX said the proposal was dependent on the Refinitiv tie-up being scrapped.

In its letter to HKEX bosses, LSE chairman Don Robert said the board was “surprised and disappointed” that the approach was published just two days after they were given sight of it.

He said its planned deal with Refinitiv has “strategic logic” and has so far been well received by investors, given that shares have risen by around 29 per cent since the deal was announced.

“In stark contrast, the high geographic concentration and heavy exposure to market transaction volumes in your business would represent a significant backward step for LSE strategically,” he added.

But HKEX said it believed a takeover would be more beneficial to the LSE than its deal with Refinitiv.

The company said it “continues to believe that the proposed combination with (LSE) represents a highly compelling strategic opportunity to create a global market infrastructure leader” and said it was “disappointed that (LSE) has declined to properly engage”.

LSE shares closed yesterday up 262p at 7,514p.

‘It would represent a significant backward step for LSE strategically’