(Alliance News) - The operator of the Hong Kong Stock Exchange has made a GBP30 billion offer to buy London Stock Exchange Group PLC.
Hong Kong Exchanges & Clearing Ltd on Wednesday said it will pay 2,045 pence in cash and 2.495 new HKEX shares for each LSEG share, valuing LSEG at GBP29.6 billion. It gives an enterprise value, which includes debt, of GBP31.6 billion.
This price, HKEX said, is a 23% premium to LSEG's 6,804.00p closing price in London on Tuesday. LSEG was up 14% Wednesday morning in London at 7,750.00p.
HKEX Chief Executive Charles Li commented: "Bringing HKEX and LSEG together will redefine global capital markets for decades to come. Both businesses have great brands, financial strength and proven growth track records.
"Together, we will connect East and West, be more diversified and we will be able to offer customers greater innovation, risk management and trading opportunities. A combined group will be strongly placed to benefit from the dynamic and evolving macroeconomic landscape, whilst enhancing the long-term resilience and relevance of London and Hong Kong as global financial centres."
HKEX said LSEG's current management would continue to run the business, and HKEX has begun talking with all relevant regulators. HKEX would carry out a secondary listing on the London Stock Exchange as part of the deal.
"HKEX believes the proposed transaction would offer the prospect of significant synergies. In particular, the migration of HKEX's trading and clearing platforms to LSEG's technology, the revenue uplift in key businesses from cross-selling and innovation opportunities and a reduction in HKEX's capital expenditures in connection with existing systems and future investment plans all present strong synergy opportunities," said HKEX.
"LSEG shareholders would benefit from the realisation of the synergies as future shareholders of the combined group."