London Stock Exchange shareholders met on Tuesday to vote on the exchange’s $27 billion takeover of analytics and data company Refinitiv, a deal designed to broaden LSE’s trading business and make it a major distributor of market data.
LSE chairman Don Robert told the meeting in London that the exchange’s board was unanimous in recommending the
Refinitiv deal because it was a ‘compelling opportunity’ in the best interests of shareholders and the company.
One shareholder asked whether the LSE was simply bulking up to avoid becoming a future takeover target.
‘We feel very strongly this is in the long-term strategic interest of the London Stock Exchange. It will give us an opportunity to have a truly global business,’ LSE chief executive David Schwimmer said.
The industry has been littered with attempts at cross-border alliances between exchanges for more than a decade as profits from the traditional business of running stock markets and clearing houses have fallen. But many of the deals have run into regulatory and political opposition.
This has pushed exchanges to look for related businesses. LSE and New York Stock Exchange owner ICE, for example, are moving into more profitable and less politically sensitive areas such as data and analytics, where revenue is rising.
LSE executives also dismissed some shareholder doubts that the exchange had the ability to make a success of the takeover, with Schwimmer saying there was a high degree of confidence that integration of LSE and Refinitiv could be well managed.
The outcome of the vote was due to be announced later on Tuesday.
The deal was announced in August, just 10 months after a consortium led by US asset manager Blackstone completed a leverage buyout of Refinitiv from Thomson Reuters.
Thomson Reuters, the parent company of Reuters News & Media Limited, holds a 45 per cent stake in Refinitiv.
Hong Kong Exchanges and Clearing threatened to derail the deal in September by making an unsolicited $39 billion takeover offer for LSE. The Asian exchange walked away after failing to convince LSE management and investors to back the move.