The London Stock Exchange (LSE) said on Friday that income grew 2% to £600 million in the third quarter to 30 September, taking the year-to-date income to £1.8 billion, up 6% year-on-year. The shares dipped 0.3% to £84.9.


More progress has been made towards securing the proposed acquisition of data analytics group Refinitiv with further clearances secured around the world bringing the number of approvals to 15.

Management believes the divestment of the Borsa Italiana group, announced on 9 October, will ‘significantly contribute’ to addressing any antitrust concerns held by the European Commission and give the green light for approval. All remaining regulatory approvals are expected to be granted by the first quarter of 2021.

The divestment for a cash consideration of €4.3 billion represents an enterprise valuation of 17.7 times 2019 adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) which the company described as an ‘attractive valuation’.

The proceeds are earmarked to repay some of the debt taken on to finance the $27 billion Refinitiv acquisition as well as general corporate purposes. The LSE intends to move quickly towards its target net debt to EBITDA ratio of one-to-two times following completion.

Meanwhile Refinitiv is said to be ‘realising its own cost efficiencies’ which puts it on track to achieve its target of a $650 million run-rate by the end of the year.


Another benefit of the Borsa Italiana divestment is that credit rating agencies Moody’s and S&P regard it as positive from a credit perspective, with the latter potentially limiting its downgrade to a single notch instead of two notches previously. Credit rating agencies provide creditworthiness opinions to investors.

S&P currently has a single A long-term rating, an investment grade rating indicating a strong capacity to meet financial commitments. Both agencies had moved their stance to ‘negative outlooks’ as a direct result of the increased debt taken on to finance the Refinitiv acquisition.

At the period end, the LSE had available committed facility headroom of £757 million after paying the interim dividend.


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Issue Date: 23 Oct 2020