After announcing plans to buy US index specialist Frank Russell for £1.59bn in June, the London Stock Exchange (LSE) has now revealed details of the rights issue that will part-fund it. It’s offering three new shares at 1,295p each for every 11 currently held.
Frank Russell’s index division is possibly best known for its small-cap Russell 2000 Index and that currently has around $5.2tn (£3.1tn) of assets benchmarked against it. The exchange's existing FTSE index, in comparison, has around $4tn of assets benchmarked to it. "This deal is the largest in the LSE’s 213-year history and marks a substantial move into the US," note analysts at broker Numis Securities. Meanwhile Chief executive Xavier Rolet says the deal will "accelerate development in one of our core strengths, intellectual property, and offers significant growth potential."