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Monday, September 23, 2019, 10:35
HKEX said to rope in various banks to court LSE investors
By Bloomberg
Monday, September 23, 2019, 10:35 By Bloomberg

Hong Kong Exchanges & Clearing Ltd has started working with UBS Group AG 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 Swiss bank has been brought in as an adviser and is helping HKEX arrange meetings with LSE shareholders, according to the people, who asked not to be identified because the information is private. Credit Suisse is also aiding HKEX set up meetings with LSE investors, a person familiar said. Some or all of the banks may be retained as financial advisers for HKEX, the people said.

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

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HKEX has also hired HSBC Holdings Plc to advise on the process, as it focuses on wooing London- and Asia-based investors, the Sunday Telegraph reported, without saying where it got the information. Top LSE shareholders will only support the deal if HKEX can convince them that LSE’s US$27 billion takeover bid for data provider Refinitiv is “absolute rubbish,” that the HKEX offer will receive regulatory approval and that the bid will be improved, the paper cited unidentified sources as saying.

Representatives for HSBC and Credit Suisse 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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HKEX has quietly begun its campaign on the ground, citing analysts’ criticism of the proposed Refinitiv acquisition, Bloomberg News has reported. 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.”

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