London Stock Exchange Group Plc Eyes “Significant Growth” Through US Acquisition

London Stock Exchange Group Plc’s (LON: LSE) Q1 results receive boost from 78 issuers joining its markets.

Mark Stones

Mark Stones (TMFMumbojumbones) joined The Motley Fool in 2014 and initially worked as a writer for Fool.co.uk, before joining the Fool’s analyst programme. Mark earned a BA in English from Loughborough University. Although he spends more time reading annual reports than Russian literature these days, he still appreciates a novelist’s antipathy toward the accepted view, which is a useful attitude when trying to sniff out hidden gems on the stock market. His approach to investing has been largely influenced by the principles of Warren Buffett and Peter Lynch. He also takes a special interest in the work of healthcare companies. Outside of investing, Mark plays guitar, enjoys good writing and has a guilty passion for combat sports.

Published 22 August, 2014 2:06 pm BST

| More on: LSEG

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London Stock Exchange Group (LSE: LSE) reported a 26% increase in Q1 adjusted pretax profit to £130m. Revenue increased by a fifth to £300m (excluding currency), driven by a resurgent IPO market with double the number of new issues on the same period last year. Capital Markets revenue increased by £12m to £87m, and there are no signs yet of a slowdown in companies seeking to raise capital on financial markets.

In a separate announcement, the London Stock Exchange Group confirmed a fully underwritten rights issue to fund the proposed acquisition of Russell Investments, the American asset manager. This “will help to expand the global footprint of the group, particularly in the key US market”, the LSEG chief executive, Xavier Rolet, said.

LSEG intends to raise net proceeds of around £938m to fund part of the cash consideration, and shareholders will be offered 3 shares for every 11 existing shares at 1,295p.

Russell Investments boss Lee Brennan said: “LSEG and Russell are two of the most highly respected financial services firms in the world, and this joining of the two organisations offers many strategic benefits. The combination of our index business with the FTSE creates a truly global index leader”.

London Stock Exchange Group shares added 5p to 2,010p in early trade. The shares have risen 16% in 2014, which compares favourably to the FTSE All-Share’s microscopic 0.2% rise.

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