Hong Kong bourse to tell LSE investors: Ditch Refinitiv for us
Hong Kong’s stock exchange will this week try to convince London Stock Exchange (LSE) shareholders that its proposed £32bn takeover is a better deal than LSE’s tie-up with data firm Refinitiv.
Read more: Hong Kong hits back at London Stock Exchange over £32bn deal proposal
Hong Kong Exchanges and Securities (HKEX) will hold meetings and phone calls with LSE investors to make the case that the creation of a global markets infrastructure group is preferable to a focus on data providing, City A.M. understands.
HKEX’s approach comes after LSE rebuffed its cash-and-share offer on Friday, saying it had serious concerns about the “strategy, deliverability, form of consideration and value” of the proposal and therefore “sees no merit in further engagement”.
LSE said increasing transaction volumes would be “a significant backward step”, adding that regulators may anyway scupper the deal. Policymakers and City figures have raised concerns that such a deal would give Beijing unwanted influence, although HKEX rejects this suggestion.
Following LSE’s statement on Friday, HKEX said it was “disappointed that LSEG has declined to properly engage”.
The Hong Kong bourse said it “had hoped to demonstrate” why the benefits of its proposal outweighed those of LSE’s deal to buy data provider Refinitiv in a $27bn (£22bn) deal that aims to set it up as a rival to data provider Bloomberg.
HKEX will now seek to convince LSE shareholders of the value of the creation of a trading powerhouse which can “offer market participants and investors unprecedented global market connectivity”.
The most significant LSE shareholders are the state-owned Qatar Investment Authority, Blackrock, Capital Group, and equity manager Lindsell Train.
A central theme of its pitch will be what it sees as the comparable weakness of the Refinitiv deal, City A.M. understands. A source told the Sunday Time: “We’re looking for shareholders to understand how bad the Refinitiv deal is.”
“Refinitiv is a desk-top service,” they said, “it’s not a data acquisition, it’s a terminal acquisition”.
Read more: Hong Kong bourse proposes £32bn merger with London Stock Exchange
Yet LSE has said it is fully committed to the deal, which will be voted on by shareholders at the end of the year. The London bourse on Friday that it has “high confidence” in “the significant value creation and deliverability of the Refinitiv transaction”.