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LSE Confirms Receipt Of Unsolicited, Preliminary, Conditional Offer From HKEX

UK bourse operator London Stock Exchange or LSEG (LSE.L) confirmed Wednesday that the Hong Kong Stock Exchange or HKEX has made a 29.6 billion British pound unsolicited, preliminary and highly conditional proposal to acquire the entire share capital of LSEG. It also implies an enterprise value of 31.6 billion pounds, inclusive of net debt and other adjustments of about 2.0 billion pounds as at June 30, 2019.

Under the terms of the proposed transaction submitted to the LSEG Board, LSEG shareholders would receive 2,045 pence in cash and 2.495 newly issued HKEX shares for each LSEG share held by them. The proposed transaction implies a value of about 8,361 pence for each LSEG share, based on the closing price of HK$245.20 per HKEX share on September 10, 2019.

The implied value of about 8,361 pence per LSEG share represents a premium of 22.9 percent to the closing share price of 6,804 pence per LSEG share on September 10, 2019.

HKEX also said it intends to continue its dividend policy of paying regular dividends with a normal target pay-out ratio of 90% of the profits of the combined group.

HKEX said it has begun conversations with certain regulators in the UK and Hong Kong and looks forward to discussing the transaction in detail with LSEG and all relevant regulatory bodies. HKEX has previously acquired The London Metal Exchange in 2012.

Meanwhile, LSEG said it remains committed to and continues to make good progress on its proposed acquisition of Refinitiv Holdings Ltd as announced on August 1, 2019. LSEG is expected to seek the approval of the transaction from its shareholders in November 2019.

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