LSE in talks to acquire GIC-backed data platform Refinitiv for $27b

London Stock Exchange. Photographer: Luke MacGregor/Bloomberg

London Stock Exchange Group Plc is in talks to acquire Refinitiv, the financial data and trading platform provider, in a deal that could be valued at $27 billion and would add fuel to the bourse’s fastest-growing business.

The exchange would issue shares as part of the transaction and Refinitiv holders may receive a stake of approximately 37%, LSE said early Saturday in London in a statement.

The effort is the first major strategic move by LSE Chief Executive Officer David Schwimmer, who joined the 218-year-old exchange from Goldman Sachs Group Inc. last August and has been riding a 40% surge in the stock price this year.

The company has seen the most growth in the last few years from its information services unit, driven by the FTSE Russell Indexes business, and adding a data goliath would aim to help accelerate that push.

It would also be a quick flip for the Blackstone Group Inc.-led consortium that bought a majority stake in Refinitiv from Thomson Reuters Corp. last year. The company has been active ever since, as its Tradeweb Markets LLC bond-trading platform went public in April, and Deutsche Boerse AG’s chief executive officer said this week that his firm is still in talks to buy some of Refinitiv’s foreign-exchange business units.

News of the talks had filtered out on Friday. A deal could be announced as soon as next week, according to people familiar with the situation who asked not to be identified because the discussions are private. No final agreement has been reached and the talks could still fall apart, the people said.

A formal agreement for the deal could be announced Aug. 1, when LSE publishes half-year earnings, according to two of the people.

A representative for Blackstone declined to comment earlier.

Thomson Reuters said in a statement it expects to hold about a 15% stake in LSE if the transaction is completed. The 30-year Reuters News agreement signed with Refinitiv in 2018 will continue if ownership of Refinitiv changes, according to the statement.

Blackstone, Canada Pension Plan Investment Board and GIC, Singapore’s sovereign wealth fund, acquired 55% of Refinitiv — as the former financial and risk unit of Thomson Reuters was renamed — in a transaction last year that valued the business at $20 billion.

Thomson Reuters, which still has a 45% stake in Refinitiv, rose 4.3% after the Financial Times reported talks between LSE and Refinitiv earlier Friday.

LSE has previously sought to bulk up by merging with Deutsche Boerse, a deal that would’ve vaulted the combined firm into the ranks of the biggest global exchange firms, along with CME Group Inc. and Intercontinental Exchange Inc. But that combination was blocked by regulatory hurdles, and Schwimmer ruled out big exchange mergers after taking the job.

“The LSE is clearly pursuing deals that are more vertical than horizontal, presumably after seeing competition difficulties issues arise when some deals with other exchanges are mooted,” said Niki Beattie, founder of consultancy Market Structure Partners in London.

In recent months, LSE has benefited from a program to link up with Chinese markets and a move by European regulators in February to allow euro clearing on both sides of the English Channel under any Brexit scenario.

Refinitiv offers products including the Eikon terminals, the FXall platform and trading execution system Redi. Bloomberg LP, the parent of Bloomberg News, competes with Refinitiv to provide financial news, data and information. (Bloomberg)

Deutsche Boerse sees Refintiv talks failing after LSE plans

The German stock exchange operator said in a brief statement that it doesn’t expect a successful completion of talks with Refinitiv after learning LSE was planning to acquire Refinitiv in a $27 billion deal that would boost the UK firm’s fastest-growing business.

News of the LSE talks with Refinitiv emerged on Friday. A deal could be announced as soon as next week, according to people familiar with the situation who asked not to be identified because the discussions are private.

Deutsche Boerse Chief Executive Officer Theodor Weimer has said that many potential acquisition targets are too expensive and has promised investors that he won’t overpay. Buying Refinitiv’s currency trading platform known as Fxall would have added to the German exchange’s existing currency platforms 360T and GTX.

(Written by William Wilkes)

Bloomberg