London Stock Exchange plans to raise 938 million GBP from investors by issue of shares. The exchange operator will use the funds to finance the acquisition of 1.6 billion GBP. After the news the shares of London Stock Exchange lowered price. At the end of June of the LSE said it would buy the company Frank Russell Company, which compiled indexes and manages assets of Northwestern Mutual.
Subscription in the rights issue will be held at a price of 12.95 GBP per share. This is a discount of 30.1% compared to the closing price on Thursday, which was 20.05 GBP. At that price the securities capitalization of LSE totaled 5.46 billion GBP. With the acquisition of Frank Russell LSE will become the owner of the index of small American companies Russell 2000. In addition, the company will become the third largest player in the growing market for exchange-traded funds (ETFs).
According to CEO Xavier Rolet LSE the transaction by the company will expand its global presence especially the key American market. To do this, LSE shareholders must approve the deal. Their general meeting is scheduled for September 10th. Furthermore LSE published its financial results for the April-June Adjusted profit before tax rose by 26% to 129.8 million GBP and revenue grew with 20% to 299.9 million GBP.
The revenue from exchange transactions rose by 16 percent during the quarter, the number of new issuers on the LSE’s main markets bounce more than twice. The markets minor benefits brought higher revenues from trading financial instruments with fixed income and growth of trading in Italy.