LSE is negotiating to buy Refinitiv Holdings financial data analysis company for $ 27 billion including debt.
According to Reuters, the acquisition comes less than a year after US asset management company Blackstone Group acquired a majority stake in Refinitiv from Thomson Reuters information and media company. In the deal with Blackstone, Refinitiv is valued at $ 20 billion including debt. Thomson Reuters is the parent company of Reuters News, which currently owns a 45% stake in Refinitiv.
LSE said it plans to issue new shares to pay for the deal, which will make Refinitiv’s existing investors become shareholders of the LSE. In the company after the merger, Refinitiv’s current shareholders will hold about 37% and less than 30% of the voting rights. Refinitiv had a debt of $ 12.2 billion at the end of December last year, the result of the acquisition by Blackstone. LSE is expected to take over this debt if it can buy Refinitiv.
LSE said that the possibility of negotiating with Refinitiv is not certain. The source of information revealed if the two sides agreed to the transaction, the agreement will be finalized next week.
Thomson Reuters shares rose 4.5%, reaching a record high in Friday’s session in Toronto, after news of the deal was announced. This stock price has increased 62% since January 2017, when Blackstone and Thomson Reuters announced the Refinitiv deal.
Owning Refinitiv will help LSE expand its information services business – an area that this floor is aiming to become a more stable source of revenue compared to the main activities related to transactions.
LSE operates stock markets and derivative transactions including London Stock Exchange, Borsa Italiana, MTS and Turquoise. The company has a market capitalization of around £ 19.3 billion ($ 23.9 billion) and a debt of about £ 1 billion.
Refinitiv purchases can help LSE reduce the shock from market fluctuations that may occur in the case of Britain leaving the European Union (EU), ie Brexit, without agreement.