Hong Kong Exchanges and Clearing (HKXCF) (HKEX) said Wednesday it had made a proposal to the board of the LSE (LNSTY) to "combine the two companies" in a cash and share deal worth £29.6 billion, or £31.6 billion ($39 billion) including debt.
The deal would "redefine global capital markets for decades to come," HKEX CEO Charles Li said in a statement.
It would reinforce Hong Kong's position as the key connection between mainland China, Asia and the rest of the world, HKEX said.
The announcement comes hot on the heels of the LSE's £22 billion ($27 billion) deal to acquire financial data company Refinitiv. That deal is aimed at transforming the LSE into global markets and information juggernaut to rival Michael Bloomberg's financial data empire.
Shares in the LSE spiked as much as 11% on the news of Hong Kong's offer, before trimming those gains slightly.
In a statement, the LSE described the offer as "unsolicited, preliminary and highly conditional."
"The board ... will consider this proposal and will make a further announcement in due course," it said, adding that it remained committed to its proposed acquisition of Refinitiv and expected to write to shareholders seeking their approval for that deal in November.
Hong Kong's offer comes at a sensitive time. Brexit uncertainty is casting a shadow over London's role as a global financial center. At the same time, Hong Kong — Asia's premier financial hub — has been rocked by months of pro-democracy protests.
HKEX said it would seek a secondary listing of its shares on the LSE after the transaction was completed to reflect its commitment to the United Kingdom.
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