THE OWNER of the London Stock Exchange (LSE) plans to raise almost £1 billion in a rights issue to help fund the acquisition of a US-based rival.
LSE Group, which also operates trading platforms across Europe, is buying index compiler and asset manager Frank Russell.
To finance the deal, the firm is raising £938 million by offering investors three shares for every 11 they already hold. Shareholders will have until 25 September to take up the offer, which has been fully underwritten.
More than 74 million new shares will be sold at 1,295p, a 30 per cent discount to the group’s closing price on Thursday.
LSE agreed to buy Frank Russell from Northwestern Mutual for £1.6bn in June in a deal that expands its presence in the large American market.
Chief executive Xavier Rolet said: “This is a strong strategic acquisition for the group, which will accelerate development in one of our core strengths, intellectual property, and offers significant growth potential.”
The announcement came as LSE reported pre-tax profits that jumped 40 per cent to £83.6m in the three months to end of June.
The group said its sales were driven by improvements in fixed income trading and a rise in initial public offerings (IPOs) which rose to 78 during the period, compared to 33 a year ago.
Rolet added: “We have seen a resurgence in the IPO market with an increase in both the number of companies joining our markets and the amount of money raised.
“While the summer period is seasonally slower, our diversified business is very well positioned for further growth.”