LSE all set to purchase all or most of Refinitiv

The ongoing tie-up talks between London Stock Exchange and Refinitiv got confirmed on Friday with the news of a tentative merger which could be seen as soon as next week.

LSE revealed that it was keen on buying the financial data analytics provider for $27 billion, including debt. Though the people familiar with the matter said that no final agreement has been formulated and talks could even fall apart. The take over attempt by the 218-years old exchange shows how data has become the most lucrative product in today’s age and time.

If the negotiations conclude into a substantial deal, LSE would get access to Refinitiv’s unique collection connectivity products, a strong enterprise data distribution business and a FXAII trading platform. According to the website of London-based data company, it provides financial markets data and infrastructure to more than 40,000 clients in over 190 countries. Over all, the anticipated merger would expand LSE’s information sharing business, providing it with a more stable source of cash flow as compared to its transaction related businesses.

“The global exchanges are focusing more and more on data and technology as revenue drivers, and less on the actual matching of buys and sells,” said Kevin McPartland, head of market structure and technology research at Greenwich Associates.

The news of Refinitiv’s takeover talks surfaced within a year of Blackstone Group’s acquiring a major stake of 55% in the company from Thomson Reuters, leaving the parent company of Reuters News with 45% stake. At that time the company was valued at $20 billion including debt.

After the news came out on Friday, the share price of Thomson Reuters shot up 4.5% to C$92.74. The professional information sharing company’s stock is up 62% since the merger between Blackstone and Thomson Reuters announced in January 2018.

LSE said if the deal with Refinitiv gets finalised, Thomson Reuters would get 15% stake in LSE. LSE also proposed that it would pay the existing Refinitiv shareholders in terms of newly issued LSE shares currency, who would get about 37% of the combined company and hold less than 30% of the voting rights.

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