London Stock Exchange Group Plc said it plans to buy back £750 million ($899 million) of shares from former Refinitiv owners including Blackstone Inc. and Thomson Reuters Corp. as it eyes more growth in the data business.
(Bloomberg) — London Stock Exchange Group Plc said it plans to buy back £750 million ($899 million) of shares from former Refinitiv owners including Blackstone Inc. and Thomson Reuters Corp. as it eyes more growth in the data business.
The bourse reported adjusted operating profit of £2.73 billion for 2022, broadly in line with estimates and up 20% on the previous year. The figures exclude various costs linked to the acquisition of data giant Refinitiv in 2021, in a deal that made the consortium LSE’s largest investor.
Shares were down 1.2% at 9:15 a.m. in London.
Chief Executive Officer David Schwimmer told reporters the LSE was “competing very aggressively” with rival exchanges in Hong Kong and New York, after a number of companies opted to have their shares trade outside London. Technology group Arm Ltd. — which was UK-listed before SoftBank Group Corp. acquired it — has now ruled out a London sale, Bloomberg News reported. Building materials firm CRH Plc on Thursday announced it’s considering pulling its London listing in favor of the US.
He said the UK’s efforts to reform listing rules and other regulations should improve the situation. “That will continue to make London that much more of a competitive and attractive listing destination and financial center,” he said in an interview with Bloomberg TV.
Schwimmer also said he was “optimistic” that the government’s deal with the European Union on Northern Ireland’s trade barriers would have a positive impact on the UK’s overall relations with the bloc.
“It does feel as if the various governments involved, the markets and economic participants are really eager to move on from the difficulties and challenges of the last few years about the whole Brexit discussion,” Schwimmer said.
Data Growth
LSE now makes most of its money from data services, having competed the $27 billion purchase of Refinitiv in 2021. It also signed a tie-up with Microsoft Corp. last year to bolster its capabilities in cloud computing. The parent company of Bloomberg News competes with Refinitiv to provide financial news, data and information.
The company plans to carry out the directed buyback by April 2024, subject to approval from investors. The move will “support an orderly sell down” for the consortium, Schwimmer told Bloomberg TV. Its shares had been subject to a lock-up period that began to expire in January.
For the coming year, LSE sees constant currency revenue growth at 6% to 8%, along with bigger savings from the Refinitiv integration of £350 million to £400 million by 2025. Chief Financial Officer Anna Manz told reporters most of the reductions were coming from procurement changes, property reductions and the group’s data centers, though some duplicate roles are also being cut.
–With assistance from Mark Cudmore.
(Updates from second paragraph with share price, CEO quotes and details on Arm and CRH.)
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