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    A worker shelters from the rain under a Union Flag umbrella as he passes the London Stock Exchange in London, Britain, October 1, 2008.

    London Stock Exchange Rejects Takeover Bid by Hong Kong Counterpart

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    Earlier this week, the Hong Kong Exchanges and Clearing Ltd. offered to purchase the London Stock Exchange Group Plc for £29.6 billion to "connect East and West" and offer customers "greater innovation, risk management, and trading opportunities".

    The London Stock Exchange has rejected the Hong Kong Stock Market's $36.5 billion takeover offer, LSE reported on Friday.

    "The Board of Directors is concerned about the key aspects of the offer such as its strategy, results, the form of payment and the cost. The Board therefore is rejecting the offer and, taking its deficiencies into account, sees no reasons for further dialogue on this issue", the LSE stated.

    The London Stock Exchange also questioned the sustainability of HKEX's position as a strategic gateway in the longer term.

    "The ongoing situation in Hong Kong adds to this uncertainty. The Hong Kong concentration and core characteristics of your business, together with your Hong Kong domicile and listing, present an additional set of difficulties", the LSE said.

    The Hong Kong Exchange, in turn, expressed its belief that shareholders in the LSE should have a chance to analyse the proposed deal in detail, adding that they will continue to engage in dialogue with their London counterparts.

    "The Board of HKEX had hoped to enter into a constructive dialogue with the Board of LSE to discuss in detail the merits of its proposal and are disappointed that LSE has declined to properly engage", the Hong Kong Exchange said.

    The Hong Kong stock market took the surprise move on Wednesday saying that bringing the two financial giants together would redefine global capital markets for decades to come.

    The HKEX said that both exchanges were "two of the world's premier market infrastructure businesses" which, when combined, would help "enhance and capture global capital and data flows".

    Following the announcement, LSE stocks went up slightly.

    Mass rallies erupted in Hong Kong in early June as the authorities were considering adopting a bill that would allow the autonomous Chinese city to extradite suspects to jurisdictions with which it did not have an extradition agreement, including mainland China. Pressured by the protests, the government indefinitely suspended the bill and Hong Kong Chief Executive Carrie Lam issued a public apology. In spite of this, the protesters continue to demand the complete withdrawal of the extradition amendments.

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