Hong Kong Stock ExchangeThe Hong Kong Exchanges and Clearing Ltd (HKEX) has withdrawn its $39 billion offer to buy the London Stock Exchange Group Plc (LSE), it said in a statement on Tuesday. The Hong Kong bourse said it failed to convince LSE’s management to back the deal that could have transformed the two into a market infrastructure giant.

“The Board of HKEX continues to believe that a combination of LSEG and HKEX is strategically compelling and would create a world-leading market infrastructure group. Despite engagement with a broad set of regulators and extensive shareholder engagement, the Board of HKEX is disappointed that it has been unable to engage with the management of LSEG in realising this vision, and as a consequence has decided it is not in the best interests of HKEX shareholders to pursue this proposal,” HKEX said.

The Hong Kong exchange had offered shareholders of the London bourse 2,045 pence in cash and 2.495 newly issued HKEX shares for every LSE share they held. Some investors had told Reuters earlier this month that the HKEX would have to raise its offer by at least 20 per cent, mostly in cash, to tempt LSE shareholders.

The deal was also contingent on a condition that LSE drops its plan to buy data and analytics firm Refinitiv. HKEX had said that the LSE-Refinitiv deal will have to be either rejected or terminated. LSE, however, had said that it is committed to and is making good progress on its $27 billion deal for Refinitiv.

LSE shareholders are due to vote on Refinitiv deal next month and the transaction is expected to close in the second half of 2020, it said in a statement.

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by Krishna V Kurup
Senior Market Analyst at IBS Intelligence
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