The approach by the HKEX also comes as Hong Kong enters a fourth month of sometimes violent political protest sparked by legislation that would have drawn the former British colony closer to the Chinese legal system.
), for one, was ordered to suspend staff who were involved in or supported the demonstrations.
“The transaction will require various regulatory approvals, which will stress-test the world’s understanding of Hong Kong’s ‘one country, two systems’ constitution,” said David Blennerhassett, an independent analyst writing on the SmartKarma research platform.
Analysts said HKEX’s share price fall reflected investor concern about the dilutive impact of the cash-and-shares offer, and scepticism the offer would succeed.
Citigroup downgraded HKEX to ‘sell’ from ‘buy’, saying the acquisition price was high and could “add downward pressure” to the exchange’s shares and valuation. Regulatory hurdles for the deal were also high, it said in its research note.
Reporting by Jennifer Hughes, Sumeet Chatterjee, Alun John in Hong Kong; Additional reporting by Donny Kwok and Lukas Jobs in Hong Kong; Editing by Stephen CoatesRead more: Reuters Top News
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