London Stock Exchange Group (LNSTY) shares surged to a fresh record high Wednesday after the London-based securities exchange received a $39 billion takeover from its Asian rival, the Hong Kong Exchanges and Clearing Limited.
However, the Hong Kong exchange said it would only go ahead with the deal if the LSE scraps talks to buy analytics firm Refinitiv from private equity group Blackstone Group (BX) - Get Report for around $27 billion in a move that was meant to shore-up the exchange operator's global reach in fixed income and data markets. The LSE said it would consider the proposal and make a further statement "in due course".
Refinitiv, which majority-owns the fixed income trading venue Tradeweb as well as the foreign exchange trading platform FXAll, is best known for its data analytics business, a leading provider of real-time pricing, reference data, private and public company information and events.
"Bringing HKEX and LSEG together will redefine global capital markets for decades to come. Both businesses have great brands, financial strength and proven growth track records," said HKEX CEO Laura Cha. "Together, we will connect East and West, be more diversified and we will be able to offer customers greater innovation, risk management and trading opportunities."
"A combined group will be strongly placed to benefit from the dynamic and evolving macroeconomic landscape, whilst enhancing the long-term resilience and relevance of London and Hong Kong as global financial centers," she added.
LSE Group shares were marked 5.67% higher in London following the Hong Kong offer and changing hands at a record high of £72.02 each, a move that values the company at just over £25.1 billion ($31.01 billion).
The HKEX, which already owns the London Metals Exchange, said it would pay £83.61 for each LSE Group share, a price that values the entire group, including its outstanding debt, at around £31.6 billion ($39 billion).