Hong Kong Exchanges and Clearing (OTCPK:HKXCY) has made a £32B unsolicited bid to buy the London Stock Exchange (OTCPK:LDNXF), looking to break up the United Kingdom group's agreed deal for Refinitiv (BX, TRI).
Shares in London Stock Exchange Group surged 10 per cent after the approach was revealed but settled back at 5 per cent up by lunchtime.
That values each LSE share at 8,361 pence, the Hong Kong bourse said in its statement.
HKEX mentioned: 'The proposed mixture would strengthen each companies, higher place them to innovate throughout markets and geographies, and provide market individuals and traders unprecedented worldwide market connectivity'. The UK company's stock rose 6.2 per cent to 7,190 pence on Wednesday at 10.54 am in London, after earlier surging as much as 16 per cent.
If completed, the deal would be by far the largest in HKEx's history.
HKEX, whose main shareholder is the Hong Kong government, said its proposal represented a 22.9 percent premium to the LSE's closing stock price on Tuesday.
But it wants the LSE to scrap its plans to buy data firm, Refinitiv.
HKEX's publication of its offer caught the London Stock Exchange off-guard.
The approach by the Hong Kong company comes as Britain is set to leave the European Union, a step some politicians fear could weaken its status as a major financial center.
Chief Executive of HKEX Charles Li said in a statement that the proposed combination will redefine global capital markets for decades to come.
"Following early engagement with LSEG, we look forward to working in detail with the LSEG board to demonstrate that this transaction is in the best interests of all stakeholders, investors and both businesses".
LSEG has faced a graveyard of past merger attempts - from Intercontinental Exchange and German rival Deutsche Boerse.
The proposed takeover of the LSE comes at a time when Hong Kong is beset by political upheaval.