London Stock Exchange Rejects Offer From Hong Kong Exchange

London Stock Exchange took a swipe at rival Hong Kong Exchange on Friday, rejecting its $36.6 billion bid and questioning Hong Kong’s future as a financial gateway to China, The Wall Street Journal reported.

Undeterred, the HKEX said it was disappointed the LSE had failed to properly engage in talks and said it would continue to talk to LSE shareholders about its unsolicited offer.

The U.K. operator said it remains committed to buying financial information and terminal company Refinitiv Holdings Ltd., a $14.5 billion deal it struck in July that would have been scrapped if the Hong Kong exchange succeeded in its bid, the Journal adds.

Shares in LSE were 2% higher after the rejection, having already risen almost 6% on Wednesday after HKEX announced its unsolicited offer, surprising investors. Analysts say HKEX could improve its offer with a larger cash component, or that other exchanges may want to bid for the London exchange.

HKEX’s bid has led some investors and analysts to question whether a new round of global exchange consolidation is coming, potentially involving the U.S. exchange giants: NYSE parent Intercontinental Exchange Inc., known as ICE, or futures-exchange behemoth CME Group Inc., the world’s biggest exchange operator by market cap.

“We’d expect the U.S. exchanges might be viewed as logical additions to fill the North American presence of a truly global exchange model,” Sandler O’Neill + Partners wrote in a research note Thursday. ICE explored a possible bid for the LSE in 2016 but ultimately backed away.

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