Magazine article Global Finance

Hong Kong Increasingly Isolated after LSE Rejects HKEX Bid

Magazine article Global Finance

Hong Kong Increasingly Isolated after LSE Rejects HKEX Bid

Article excerpt

Presented as a link between East and West, the proposed $36.6 billion takeover bid for the London Stock Exchange (LSE) by Hong Kong Exchanges and Clearing (HKEX) was speedily rejected by the UK exchange. The main reasons for the proposed deal were political, but politics was also the reason for its defeat.

"As China's economic growth has accelerated, so too has Hong Kong's role as a vital connector between East and West, and today's announcement is the next major step on the path of connecting China and Asia with the world," Charles Li, chief executive of HKEX, stated when the exchange announced its bid for the LSE on September 11.

The official rejection, which came only two days later, stated that the offer lacked commercial rationale, undervalued LSE assets and was unviable because of HKEX's ties to the Hong Kong government, which has a 6% stake in the exchange and appoints six of its 13 board members. …

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