Hong Kong enlists help of banking heavyweights to win over London Stock Exchange shareholders

Lucy Burton and Harriet Russell 21 September 2019 • 9:00pm

LSE — HKEX has approached HSBC and Swiss banks UBS and Credit Suisse in their latest attempt to win credibility with skeptical investors

The Hong Kong stock exchange has called on a duo of banking heavyweights to help it charm London Stock Exchange shareholders, after its shock £32bn takeover approach was comprehensively rejected by the board.

The Telegraph understands that HSBC has been hired by Hong Kong Exchanges and Clearing (HKEX) to advise it on the process after the banking giant helped it organise meetings with City investors last week. The bank is likely to announce the move tomorrow. Swiss bank UBS has also been drafted in to add credibility to the HKEX bid.

HSBC and UBS are focusing on wooing investors based in London and Asia.

HKEX has a long-standing relationship with HSBC. Its chairman Laura Cha, appointed with approval from the Hong Kong government, also sits on the banking giant’s board as a non-executive director.

HSBC has agreed to organise meetings with City investors in the hope that it will land an official role on the deal, multiple sources said.

Hong Kong launched a charm offensive earlier this week to convince LSE investors that they should ditch the British bourse’s £22bn takeover of trading screen provider Refinitiv.

It follows LSE’s harsh rejection of Hong Kong’s shock bid last week, which it called “fundamentally flawed”. It also reiterated its commitment to the Refinitiv takeover, which was only announced last month.

LSE chief David Schwimmer told attendees at a London conference this week that he still felt “very good” about the Refintiv deal.

Regulatory filings show that the LSE has hired US investment bank JPMorgan to help it defend against a possible hostile bid from HKEX.

Top LSE shareholders said last week that they will only entertain Hong Kong’s move if they can be convinced that the Refinitiv takeover is “absolute rubbish”, that regulators will approve the deal and if the bid is sweetened.

“The market is not really taking it seriously,” said one major LSE investor. “We will see them, but it’s almost like why are you bothering? If they did a pretty comprehensive demolition of the Refinitiv deal [we might be more interested].”

Other investors said they were still keen to avoid the deal because of the high level of political risk.