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London Stock Exchange Bid in the Works For Long Time: HKEx Chairwoman

By Wang Duan, Wei Yiyang, and Liu Jiefei / Sep 12, 2019 01:50 PM / Business & Tech

Photo: VCG

Photo: VCG

It caught markets by surprise, but the Hong Kong stock exchange’s unsolicited 29.6 billion pound ($36.5 billion) bid for the London Stock Exchange Group (LSE) has actually been in the works for quite some time, HKEx’s chairwoman is telling Caixin.

The move is in line with a strategic plan that Hong Kong Exchanges and Clearing Ltd. (HKEx) published in February, which included an aim of expanding its global connections, HKEx Chairwoman Laura Cha Shih May-lung told Caixin.

The proposition was first floated by the board of directors, and an initial framework for the offer was hammered out last September, she said.

A successful purchase would strengthen and expand the Chinese mainland’s stock markets, which are linked to Hong Kong’s via two connect programs, said Cha, who was also a previous vice chairman of China’s securities regulator from 2001 to 2004. It would also have a positive influence on China’s market opening, she added.

Investors in the LSE operator were jazzed about the deal, bidding up the company’s London-listed shares nearly 6% after on Wednesday after the initial announcement. HKEx investors were less impressed, with the company’s share price down 3.58% in Thursday morning trade.

The proposed deal would mark the HKEx’s second major overseas expansion. It previously acquired the London Metal Exchange, the world’s largest market in options and futures contracts on base and other metals, in 2012 for 1.4 billion pounds.

Additional reporting by Han Wei.

Contact reporter Liu Jiefei (jiefeiliu@caixin.com)

Related: HKEx Offers $36.5 Billion to Buy London Stock Exchange

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