HKEx drives on with new offering to fund LME takeover
Bourse moves ahead with first share sale in a decade after 'last big hurdle' cleared in takeover of London Metal Exchange
Hong Kong Exchanges and Clearing is making its first share offering since it was listed, aiming to raise US$800 million following the British regulator's approval yesterday for HKEx's takeover of the London Metal Exchange.
The Financial Services Authority gave the go-ahead for HKEx's £1.39 billion (HK$17.24 billion) bid for the LME, the world's biggest metal exchange.
The deal will now need the sanction of the High Court of England and Wales, due on Wednesday, to become unconditional and effective. But brokers said the FSA's approval was the last major hurdle, so they considered the deal as done.
HKEx plans to sell new shares to fund part of its payment for the LME, the first such offering since its listing in 2000. A term sheet seen by the shows the bourse aims to raise US$800 million.
The shares will be priced in an indicative range of HK$116.10-HK$119, translating into a discount of between 4.7 per cent and 7 per cent to yesterday's closing price of HK$124.80. Buyers of the new shares will be subject to a 90-day lock-up period.
"About 90 per cent of the overall deal was covered before the market close," said a syndicate banker who declined to be named, because the deal is private.
