HONG KONG Exchanges and Clearing Ltd. (HKEX) made a US$39 billion takeover approach to the London Stock Exchange Plc (LSE) on Wednesday, aiming to create a global trading powerhouse and thwart the latter’s US$27 billion acquisition of financial data provider Refinitiv.

HKEX is seeking to capitalize on the weakness of the British pound, which has been hit by Britain’s inability to settle on a deal to leave the European Union. The weaker pound has made British companies cheaper for foreign acquirers.

The proposed deal is aimed at creating a combined group better able to compete with U.S. rivals such as Intercontinental Exchange Inc. and CME Group Inc. It is contingent on LSE abandoning the deal it clinched last month to acquire Refinitiv.

“The board of HKEX believes a proposed combination with LSE represents a highly compelling strategic opportunity to create a global market infrastructure leader,” the Hong Kong exchange said in a statement.

LSE said it would review HKEX’s proposal. In a sign of its cool reception to HKEX’s bid, it added that it was committed to, and continued to, make good progress on its planned acquisition of Refinitiv from U.S. private equity firm Blackstone Group Inc. and Thomson Reuters Corp.

Under the terms of the offer, LSE shareholders would receive 2,045 pence in cash and 2.495 newly issued HKEX shares. HKEX said it intends to apply for a secondary listing of its shares on the LSE once the deal has gone through.

HKEX said its 31.6 billion pounds (US$39 billion) cash-and-share transaction proposal represented a 22.9 percent premium to the LSE’s closing stock price Tuesday of 8,361 pence.

(SD-Agencies)