{I-bank focus}HKEX's offer for LSEG not attractive - BofAML

    BofA Merrill Lynch said HKEX's (00388) acquisition of London Stock Exchange Group (LSEG) is a surprise. It believes there could be uncertainties in pricing, regulatory approval, and synergy, especially when both countries/regions are facing unprecedented uncertainties.
  HKEX offers 2,045p and 2.495 newly issued HKEX shares for per LSEG share, or around
8,361p based on the current price of HKEX.
  The research house believes that the bid is not very attractive. This is below BofAML's
price objective of 8,500p, which itself is a discount to the valuation BofAML achieved assuming the Refinitiv deal succeeds. Therefore, this is far from a knock out bid.
  It added that the failure of the merge between LSE and Deutsche Borse in 2017 was still a fresh lesson to show how difficult cross border exchange M&A could be, and in the current environment, uncertainties could increase with the impact from Sino-U.S. trade wars, Brexit and the unrest in Hong Kong.
  In addition, the government background of HKEX could also lead to concerns. BofAML thinks that this deal would certainly be challenging to bring to fruition.
  The research house maintained its target price of HK$255 and "neutral" rating on HKEX due to uncertainties.