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Monday, September 23, 2019, 18:29
HKEX said to tap UBS, HSBC to court LSE shareholders
By Bloomberg
Monday, September 23, 2019, 18:29 By Bloomberg

Hong Kong Exchanges & Clearing Ltd has started working with UBS Group AG and HSBC Holdings Plc as it begins its charm offensive to convince London Stock Exchange Group Plc investors on the merits of its takeover bid, people familiar with the matter said.

The move came after the London Stock Exchange last week rejected HKEX's US$37 million takeover offer

The European banks are being brought in as advisers and are helping HKEX arrange meetings with LSE shareholders, according to the people, who asked not to be identified because the information is private.

The Hong Kong bourse was already working with US boutique investment bank Moelis & Co on the US$37 billion bid.

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Credit Suisse Group AG has also aided HKEX in setting up meetings with some LSE investors, a person with knowledge of the matter said. Shares of LSE were unchanged at 10:25 am Monday in London.

Major LSE shareholders will only support the deal if HKEX can convince them that LSE’s preference for US$27 billion takeover bid for data provider Refinitiv is a poor strategy and that the HKEX offer will be improved and receive regulatory approval, the Sunday Telegraph reported, without saying where it got the information.

Representatives for Credit Suisse, HKEX, HSBC and UBS declined to comment.

LSE last week rejected HKEX’s takeover offer, citing problems in “strategy, deliverability, form of consideration and value.” HKEX said afterward LSE shareholders “should have the opportunity to analyze” the proposal in detail.

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While LSE’s stock soared after the Refinitiv deal, there are dissenting views. An Aug 13 Commerzbank AG research report pointed to sluggish growth at Refinitiv and said a substantial part of its revenue base is in “structural decline.” HKEX has cited such analysis as it seeks to sway LSE’s investors, Bloomberg News has reported.

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