--LSEG shares rose on the approach
--LSEG will consider the offer and respond in due course, and remains committed to its Refinitiv deal
--The offer values each LSEG share at 8,361 pence, a 23% premium to Tuesday's closing price
By Ian Walker
Shares of London Stock Exchange Group PLC (LSE.LN) jumped as much as 16% in early trade Wednesday after the Hong Kong Exchanges & Clearing Ltd. (0388.HK) said Wednesday that it has approached the LSEG with a 29.6 billion pound ($36.54 billion) cash and share offer.
Describing the deal as a "highly-compelling strategic opportunity to create a global market infrastructure leader" the HK Exchange said it would seek a recommendation from the LSEG board.
"Following early engagement with LSEG, we look forward to working in detail with the LSEG board to demonstrate that this transaction is in the best interests of all stakeholders, investors and both businesses," HK Exchange Chairwoman Laura Cha said.
LSEG said that it will consider the proposal and make a further announcement in due course. It added that the board remains committed to, and continues to make progress with, its proposed acquisition of Refinitiv Holdings Ltd., as announced last month.
LSEG shares at 0945GMT were up 446 pence, or 6.6%, at 7,250 pence, having peaked at 7,922 pence earlier in the session.
If the deal goes ahead, accepting LSEG shareholders would get 2,045 pence in cash and 2.495 new HK Exchange shares for each LSEG share held. The offer values each LSEG share at 8,361 pence based on the HK Exchange's closing share price of 245.20 Hong Kong dollars ($31.28) on Sept. 10.
The price is a 23% premium to the LSEG's closing share price of 6,804 pence on Tuesday and puts an enterprise value on the exchange of GBP31.6 billion, including debt.
If the deal goes ahead the HK Exchange said it will apply for a second listing on the London Stock Exchange. It added that the HK Exchange has already started talks with both Hong Kong and U.K. regulators over the governance structure of the combined group.
It said that key LSEG management would continue to operate the business and join the HK Exchange management if the deal completes.
LSEG announced on Aug. 1 that it had agreed to buy Refinitiv, the former financial data and risk business of Thomson Reuters, in a $27 billion all-share deal including debt.
The exchange operator is buying the business from a consortium of companies that includes Reuters and funds affiliated with U.S. asset manager Blackstone Group Inc. (BX). Under the terms of the proposed transaction the current owners of Refinitiv will retain a 37% stake in the combined business after completion.
Write to Ian Walker at email@example.com
(END) Dow Jones Newswires
September 11, 2019 06:19 ET (10:19 GMT)Copyright (c) 2019 Dow Jones & Company, Inc.