HKEX abandons bid for London stock exchange

Hong Kong Exchanges & Clearing Ltd. abruptly dropped its 29.6 billion-pound ($36.4 billion) unsolicited takeover bid for London Stock Exchange Group Plc after a sharp rebuke from the U.K. company and a consistent thumbs-down from shareholders.

The decision is a rare setback for HKEX Chief Executive Officer Charles Li, who saw London at the center of trading between Eastern and Western markets. The withdrawal leaves LSE free to pursue its $27 billion takeover of Refinitiv, taking the 300-year-old bourse further away from a traditional exchange model and deeper into big data.

Li said yesterday that the “vision for the business looking forward is to build upon the role we already play in Hong Kong, China, Asia and more widely.” A spokeswoman for LSE declined to comment.

Before yesterday’s about-face, the region’s largest exchange by revenue struggled to regain momentum after last month’s stinging rebuke from LSE’s board. HKEX executives met LSE shareholders in London and New York to try to gain their backing for the takeover plan. The bourse also was in talks to borrow as much as 8 billion pounds to fund the purchase.

While the HKEX’s board continues to see a combination as “strategically compelling,” it’s “disappointed that it has been unable to engage with the management of LSEG in realizing this vision, and as a consequence has decided it is not in the best interests of HKEX shareholders to pursue this proposal,” the exchange said in a filing yesterday.

Li’s LSE counterpart, David Schwimmer, has said he preferred direct access to China and didn’t need the former British colony as a conduit. LSE last month rejected HKEX’s initial takeover proposal, citing complications ranging from political unrest in Hong Kong to potential problems with regulators. MDT/Bloomberg