If Wednesday’s surprise announcement by the Hong Kong Exchanges and Clearing (HKEx, 00388.HK) of its proposal to acquire the London Stock Exchange (LSE) were a drama, would it be a comedy or a tragedy?
Well, some people don’t seem to like a cross-border marriage, and the path to the altar is likely to be steep, bumpy and challenging.
There are those who don’t like a rich Chinese suitor flaunting wads of cash to charm his princess. The London bourse sniffed at the unsolicited offer of 32 billion pounds (US$39.45 billion), and, according to the Financial Times, is leaning towards rejecting the bid.
Interestingly, the proposal came six weeks after the LSE proposed a merger with Refintiv, a financial markets data provider, in a 27 billion pound deal.
But here comes the Hong Kong stock exchange making a sweeter proposition and seeking to steal the bride.
“We are here like a corporate Romeo and Juliet,” HKEx chief executive Charles Li Xiaojia said in a conference call. “We know we were late … we want to openly express our admiration.”
His words became a butt of jokes in British media. The Guardian newspaper said the HKEx top honcho might want to re-read Shakespeare’s tragedy before comparing his proposed Hong Kong-British stock market union with the star-crossed lovers Romeo and Juliet.
“After all, the story does not have a happy ending,” it said.
That’s why LSE shares fell 10 percent in early trading on Wednesday but closed with a 6 percent gain. HKEx opened trading with a more than 3 percent drop.
In unions such as this, it’s not just the suitor and the one being courted who are involved. Other relatives such as Uncle Sam may enter the picture and try every way to stop the marriage.
After all, who wants to upset the equilibrium in the NyLonKong global financial center?
It’s a bold proposal, definitely. But, as some people say, money can’t buy you love.
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