Wednesday 25 September 2019 1:36 pm

Hong Kong bourse 'may increase' £32bn offer for London Stock Exchange, says Swiss peer

Hong Kong Exchange and Clearing (HKEX) will likely raise its blockbuster offer for the London Stock Exchange (LSE), according to the chief executive of a fellow bourse heavyweight.

Swiss stock exchange boss Jos Dijsselhof has told City A.M. that he expects HKEX to up its current £32bn takeover proposal for its London counterpart, but he remains convinced that the deal is still unlikely to go through.

Read more: Hong Kong Stock Exchange drafts in bankers to woo LSE investors

“They [HKEX] can up the offer quite easily, I’m quite convinced they will do. But I still think the deal is a low probability…from the LSE side the strategic rationale is not clear,” he said.

The boss of Six, Switzerland’s biggest exchange, thinks that the LSE’s own $27bn (£21.8bn) plans to snap up data provider Refinitiv had more support than the alternative HKEX-LSE tie-up.

Speculation that HKEX will raise its offer has mounted since the LSE snubbed the original proposal earlier this month, with the Hong Kong bourse drafting in a number of banks to convince shareholders of the deal.

HKEX’s original offer implied a value per share of 8,361p for the London Stock Exchange.

“Refinitiv seems to have market support, regulatory support, broad support, management support – support from many different areas. I have not heard people talk negatively about this transaction, but the Hong Kong one is a very aggressive move,” Dijsselhof said. 

The comments come as the Swiss stock exchange currently faces a standoff of its own following a dispute with Brussels over stock market equivalence.

Dijsselhof said that the Swiss have not received indefinite equivalence because of political decisions in Brussels made due to Brexit negotiations with the UK.

Investors on both sides have lost direct access to each others’ stock exchanges since July.

Read more: Hong Kong stock exchange boss admits he would reject his own offer for LSE

“Their [the EU] stance has hardened for sure. They don’t want to give anything to Switzerland that they’re not willing to give to the UK – any lenience they give to Switzerland they would then have to replicate in an orderly Brexit deal, if that ever happens”.

However, due to Swiss retaliation measures to the EU’s stance, Djisselhof insists that the group is “well protected” to the current standoff, but urged both sides to come to an agreement.