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The London Stock Exchange has rebuffed Hong Kong's unsolicited takeover bid in a strongly worded letter and separate website post spelling out its concerns about the "fundamental flaws" of the plan, which included the current political crisis engulfing the city.
The UK bourse's board of directors said it had unanimously rejected the US$36.6 billion proposal from Hong Kong Exchanges and Clearing, which surprised the market when it was announced earlier this week.
In a letter to the chairman and chief executive of Hong Kong Exchanges and Clearing, LSE chairman Don Robert pulled no punches, making clear his preference for Shanghai over Hong Kong as a strategic partner.
"We do not believe HKEX provides us with the best long-term positioning in Asia or the best listing/ trading platform for China. We value our mutually beneficial partnership with the Shanghai Stock Exchange which is our preferred and direct channel to access the many opportunities with China," it said.
He was referring to LSE's existing stock connect scheme with Shanghai Stock Exchange, which he said gives it direct access to China.
A statement posted on the LSE website on Friday said: "The board has fundamental concerns about the key aspects of the conditional proposal: strategy, deliverability, form of consideration and value," said a statement posted on the LSE website on Friday, just two days after the local bourse made the unexpected offer.
"Accordingly, the board unanimously rejects the conditional proposal and, given its fundamental flaws, sees no merit in further engagement."
HKEX makes US$36.6 billion surprise bid to take over London Stock Exchange
Robert's letter to his HKEX counterpart, Laura Cha Shih May-lung, and chief executive Charles Li Xiaojia, set out the reasons for the rejection and expressed dismay at HKEX's conduct.
"We were very surprised and disappointed that you decided to publish your unsolicited proposal within two days of our receiving it," Robert said in the letter, referring to the "highly conditional proposal" made in private by the HKEX on Monday.
The HKEX, which operate the third-largest capital market in Asia, responded in a statement late on Friday, saying it was disappointed the LSE had "declined to properly engage".
"In particular, HKEX had hoped to demonstrate why it believes that the benefits of its proposal significantly outweigh those of the proposed acquisition of Refinitiv," it said, adding that it would continue to "engage with shareholders".