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LSE seals $27bn Refinitiv deal

The bourse plans to complete the deal before the end of next year
August 1, 2019

Just days after London Stock Exchange (LSE) confirmed its bid to buy Thomson Reuters' data service Refinitiv, the bourse used its half-year numbers to announce final deal terms. Should all go to plan, investors can expect the deal to complete during the second-half of 2020, but if regulators fail to approve the deal LSE could be on the hook for a £198m break fee. 

IC TIP: Hold at 7062p

Until then, investors will hope for more of the same from the majority-owned post-trade clearing business, LCH, which was the main driver of revenue growth during the first-half of 2019. SwapClear was another bright spot, clearing a record €660trn in over-the-counter derivatives, a 15 per cent rise on the prior year, helped by a 10 per cent uptick in membership. 

FTSE Russell Indexes – that has benefited from the explosive popularity of exchange traded funds (ETF) - was boosted by a 9 per cent rise in ETFs benchmarked to them. Information services also sought to capitalise on another investment trend, acquiring ESG-focused fixed income data provider Beyond Ratings.  

The value of equity traded on LSE and Tortoise declined by more than a quarter, while fixed income, derivatives and other trading revenue fell by 4 per cent in aggregate. However, new revenue recognition accounting standards boosted capital markets revenue 5 per cent higher.

Bloomberg consensus forecasts adjusted EPS of 191.7p for the year to December 2019, up from 170.8p in 2018.

LONDON STOCK EXCHANGE GROUP (LSE)  
ORD PRICE:7,062pMARKET VALUE:£ 24.7bn
TOUCH:7,060-7,064p12-MONTH HIGH:7,152pLOW: 3,842p
DIVIDEND YIELD:0.9%PE RATIO:51
NET ASSET VALUE:990p*NET DEBT:24%
Half-year to 30 JunTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20180.9536071.117.2
20191.0236370.720.1
% change+7+1-1+17
Ex-div:22 Aug   
Payment:17 Sep   
*Includes intangible assets of £4.67bn, or 1,334p a share