Hong Kong Exchanges is adamant with its £32bn bid for the LSE, (London Stock Exchange takeover), in spite of a staunch rejection from the UK group stating it as an “unsolicited approach.”
In a statement response this Friday, the LSE marked its skeptical views regarding the technical feasibility, its value, and strategy and enquired about the robustness of its rival in Asia to keep its level of “strategic gateway” to the Chinese economy in the light of aggressive competition from Shanghai and Shenzhen.
Unfortunately, HKEX’s offer opened while the social upheaval is in its full form in the Asian financial hub, so the questions about Hong Kong’s potential for China are no surprise. However, territory’s government can elect 7 of 13 members on board for HKEX.
“The board unanimously rejects the conditional proposal and, given its fundamental flaws, sees no merit in further engagement,” the LSE spoke in the statement.
The Hong Kong exchange stated that it was dissatisfied with the London exchange’s reckless decision declining to “properly engage” in the event. It was also mentioned to take the case to other shareholders. The meetings with Investors are being scheduled for the coming week.
The LSE in a statement responding to HKEX said:
“There is no doubt that your unusual board structure and your relationship with the Hong Kong government will complicate matters. Accordingly, your assertion that the implementation of a transaction would be ‘swift and certain’ is simply not credible.”
The exchange channeled an active week at LSE and was astonished on Monday at having received an offer in shares and cash of £83.61 per share straight from Hong Kong. HKEX decided to go public on Wednesday with such offer. It can now safely take its time to make an official offer to the London stock exchange, until the 9th of October.
The acquirer to-be undergoes an unending struggle, as the investors are requesting for more cash and are not looking optimistic about the UK government’s approval of the deal. One of the top-10 shareholders spoke:
“The price and the mix with shares are too low — the politics are difficult. It’s not credible as it stands.”
The HELIX is now looking forward to splitting $27 billion of LSE data purchase and Refinitiv trading group prior to shareholders voting for the deal later this year. A number of investors are also backing the bid to act according to the layout plan by, LSE’s chief executive, David Schwimmer.
“As shareholders in LSE, it’s difficult to evaluate the merits of a combination with HKEX as we have been given no information on potential synergies,” spoke chief investment officer, James Bevan, CCLA, a stakeholder.
Harold joined our team as a reporter while still studying, a job that suited him perfectly as he always prefers working on the stock analysis. He has a passion for new technologies, economics, finance, and is always keen to learn more about the ever-changing world of journalism. Harold also likes to explore new things in his free time.