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Home / Business / London Stock Exchange Confirms Discussion to Buy Refinitive for $ 27 Billion

London Stock Exchange Confirms Discussion to Buy Refinitive for $ 27 Billion



The London Stock Exchange Group has confirmed that advanced talks are about buying $ 27 billion of refinish, which would make the company a global stock-market and data powerhouse.

The explanation came after the Financial Times revealed talks between the parties on Friday.

A refinitive business that Thomson Reuters completed last year as part of a deal with Blackstone would make LSE the main competitor to Michael Bloomberg's financial news and data empire with a combined annual turnover of more than £ 6bn.

In its statement after midnight in London, LSE said it would pay for the transaction in full by issuing new shares. This will result in the refinancing shareholders owning about 37 percent of the entire group, even though they will have less than 30 percent of their voting rights.

The LSE closed on Friday with a market value of approximately £ 1

9.3 billion and net debt of approximately £ 1 billion.

Refinitiv, whose Eikon terminals are Bloomberg's main competitor on the floor of financial markets, was valued at $ 20 billion last year. The group was bought by a Blackstone-led private equity consortium, which took over much of the business from Thomson Reuters, the news and data group.

The consortium has committed $ 13.5 billion of debt to the company's books in this deal. Based on this number and the $ 27 billion enterprise value as stated by the LSE, LSE plans to spend approximately $ 13.5 billion in new shares, or just under £ 11 billion, in one of the largest London equity offerings in the coming years , [19659002] If enforced, the deal would transform LSE, which is best known for trading exchanges and clearing derivatives, into a diversified market leader in data and analytics under Goldman Sachs former banker David Schwimmer.

Mr. Schwimmer was appointed Chief Executive of the LSE in April of last year after spending several months searching for Xavier Rolet, the Frenchman who had ended his eight-year term in the group following a government crisis.

"The combined business would create a leading, UK-based, global financial infrastructure provider with substantial multi-asset capital market capabilities, a leading data and analytics business, and a broad post-trade offering in a good position for future growth evolving landscape, "said the LSE.

It aimed to achieve annual cost savings of over £ 350m within five years of signing a contract. Don Robert, chairman of the LSE, and David Warren, chief financial officer, should keep their roles.

The talks are taking place at a time when London's role as a global financial center is being challenged and Britain is preparing to leave the EU under Boris Johnson, his new prime minister.

Just 18 Months ago The Blackstone-led consortium, which included the Canada Pension Plan Investment Board and the Singapore State Fund GIC, agreed to purchase a 55 percent stake in Thomson Reuters' finance and risk division the latter retains minority interest in the Reuters Newswire division and other entities.

The consortium had agreed to pay Reuters News at least $ 325 million a year for 30 years under the agreement.

Since then, investors have renamed the Refinitive business and started a cost-cutting campaign to make the business more efficient.

Thomson Reuters shares, which hold 45 percent of privately held refines, rose 4.3 percent in New York trading, according to the FT report.

Refinitiv was expected to sell some assets after Blackstone took control of the company. Over the past few months, she had talked to Deutsche Börse about the sale of its foreign exchange deal FXall, an electronic currency trading platform valued at around $ 3.5 billion. Deutsche Börse recently said that it is still in talks. In its statement, the LSE said that Refinitive reported net revenues of $ 6.3 billion and earnings before interest, taxes, depreciation and amortization of $ 1.6 billion in LSE in the fall of 2017.

The former banker spent more than £ 4 billion on enterprise data collection and clearing to respond to post-crisis market developments.

The best-known businesses included the purchase of index compilers Russell Investments and FTSE International, of which 50 percent were already owned.

It also bought a controlling stake in the clearinghouse LCH. Above all, Mr Rolet sought a merger with LSE's main European competitor, Deutsche Börse, which collapsed in March 2017. and XTF, which focuses on exchange-traded funds. The group also owns The Yield Book, a fixed income indexing service.

Stock exchange groups in the US and Europe have expanded their data and analytics offerings in recent years as trading in stocks and bonds has become more electronic and faster data sources for which they can raise a premium.


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