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HKEX abandons £32bn bid for LSE after charm offensive fails

Hong Kong Exchanges and Clearing has abandoned its £32bn offer for the London Stock Exchange Group, ending its attempt to create a global capital markets operator and break up the LSE’S rival deal for Refinitiv.

The Hong Kong bourse said on Tuesday that it was “disappointed” it had not convinced the LSE’S management over its plans, which it submitted a month ago.

Its cash- and- shares offer amounting to £83.61 per share was based on the LSE giving up its agreed deal to buy Refinitiv, the data and trading group, for $27bn. However, the LSE flatly rejected its rival and its shareholders were unmoved by a three-week charm offensive Hong Kong launched to persuade them.

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Charles Li, chief executive of HKEX, said the board had concluded an offer was not in the best interests of its own shareholders. “We only regret the chances we didn’t take,” he said in a blog post. “We believe the strategic rationale for the combination of our two businesses is compelling.”

In response, the LSE said it remained committed to its purchase of Refinitiv and expected to post a circular to shareholders in the coming weeks, and then hold a vote in November.

Shares in HKEX, which had until the end of Wednesday to make a formal bid, gained 2.3 per cent in Hong Kong on Tuesday. LSE shares dropped 6 per cent to close at £70.02.

Chris Turner, an analyst at Berenberg in London, said HKEX’S decision to pull the plug was not a huge surprise. “Investors were asking them to sweeten the bid to £95 and upwards, yet even a simple merger model showed that was not possible. They simply didn’t have the financial ability to do what investors were demanding.”

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