Hong Kong bourse pulls plug on $39b play for London Stock Exchange

HONG KONG, Oct 8 (Reuters): Hong Kong's bourse on Tuesday scrapped its unsolicited $39 billion approach for London Stock Exchange Group (LSE) after failing to convince LSE management to back a move that could have transformed both global financial services giants.

Last month's surprise cash-and-shares approach threatened to upend the LSE's $27 billion plan to buy data and analytics firm Refinitiv. The Hong Kong exchange had said the LSE would have to ditch the Refinitiv purchase for its offer to go ahead.

LSE shares slid 6.1 per cent by 0805 GMT, close to their lowest since Hong Kong Exchanges and Clearing Ltd (HKEX) announced its approach on Sept. 11, while the Hong Kong bourse's stock was up 2.3 per cent near the end of its trading day.

HKEX chief executive Charles Li wrote in a blog post: "We still believe the strategic rationale for the combination of our two businesses is compelling and would create a world-leading market infrastructure group."

"Despite a huge amount of work and discussions with a broad set of regulators and extensive shareholder discussions, the level of engagement from LSEG led us to conclude that the continued pursuit of a combination of the two businesses would not be in the best interests of our own shareholders."

The LSE did not respond to a request for comment. Refinitiv is 45 per cent-owned by Thomson Reuters which owns Reuters News.

One LSE investor told Reuters it would have been "very, very hard to get the LSE board to engage as they rebutted the offer on grounds of strategy, not price." The investor spoke on condition of anonymity due to the sensitivity of the matter.