London Stock Exchange rejected Hong Kong’s $37 billion takeover bid, saying it was too low, politically risky and lacked strategic merit.
LSE’s board in a statement on Friday said it “unanimously” rejects this week’s conditional proposal from Hong Kong Exchanges and Clearing (HKEX).
LSE (LNSTY) added that it sees “no merit in further engagement” because of the offer’s “fundamental flaws.” The London exchange said it remained committed to its acquisition of financial data provider Refinitiv.
Economist speculated that the bid would fall, given the worries about Chinese influence over vital financial infrastructure and concerns about reduced competition.
HKEX responded in a statement that said it “continues to believe that the proposed combination … represents a highly compelling strategic opportunity.”
Hong Kong company suggested that it could now make a hostile bid that would allow investors in LSE to choose between an improved offer and the planned purchase of Refinitiv.
“HKEX believes that shareholders in LSE should have the opportunity to analyze in detail both transactions and will continue to engage with them,” the statement said.
A higher bid with improved terms could do the trick but the deal could face regulatory hurdles.
Source : Various