LONDON - Hong Kong Exchanges and Clearing Ltd unveiled a US$39 billion takeover approach to the London Stock Exchange Plc on Wednesday that received a cool response from investors concerned about its regulatory and financial hurdles.
HKEX is also seeking to capitalise on the weakness of the British pound, which has been hit by Britain's inability to settle on a deal to leave the European Union. The weaker pound has made British companies cheaper for foreign acquirers. HKEX, whose main shareholder is the Hong Kong government, said its 31.6 billion pounds cash-and-share transaction proposal represented a 22.9 per cent premium to the LSE's closing stock price on Tuesday of 8,361 pence.
"It looks uncertain whether shareholders will accept the offer, given that the Refinitiv deal is popular across the shareholder base for its potential to transform the business and add value over the long-term," said Guy de Blonay, a fund manager at Jupiter, a top-25 investor in the LSE. A spokesman for the US Department of the Treasury, which chairs CFIUS, did not respond to a request for comment on whether the deal would be subject to CFIUS review.Refinitiv's deal with LSE came just 10 months after Blackstone bought a majority stake in the unit from Thomson Reuters in a US$20 billion deal.
But this year it has fallen behind, raising US$10.8 billion to the NYSE's US$20.2 billion, with activity suffering as the political turmoil deepened. Last month, Chinese e-commerce giant Alibaba Group Holding delayed plans for a US$15 billion offering in Hong Kong because of the unrest.
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