Hong Kong bourse scraps $39-billion play for London Stock Exchange

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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.

In a statement, the board said it still believed a tie-up was "strategically compelling" and "would create a world-leading market infrastructure group".

Today's announcement follows on from a rather hostile response from LSEG regarding the takeover.

HKEX made its shock proposal on September 11 before LSEG formally rejected the offer the following day, citing "fundamental" flaws and concerns over its ties to the Chinese city's government.

HKEx has said the LSE will have to ditch the Refinitiv purchase for its offer to go ahead.

The announcement by Hong Kong Exchanges and Clearing (HKEX) came almost four weeks after the London bourse firmly rejected the approach as a "significant backward step" and said it saw "no merit" in holding talks with its Hong Kong rival.

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The London Stock Exchange could not immediatelybe reached for comment.

HKEX shares rose 2.7 percent in early trading in Hong Kong following the news, compared with a 0.9 percent gain for the blue-chip Hang Seng Index.

However, Li said pursuing a "combination of the two businesses would not be in the best interests of our own shareholders". "Still, we look forward to next year's attempt".

He added: "We are honest with ourselves too - as we know some things we try will not develop at the speed which we would like or, in some cases, at all".

Shares in LSEG were down 5.8% on Tuesday morning. Charles Li has done a lot of deals, most notably the London Metal Exchange. "It may not be a stock exchange, but other related areas".

Since the HKEX unveiled its takeover offer last month, LSEG stock has held stubbornly below the bid level - which stood at more than £83 per share - as investors remained unconvinced. "If that deal fails then HKEX will be there".

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