Thanks, but no thanks. The London Stock Exchange (LSE) has rejected a $36.6 billion unsolicited offer to be acquired by Hong Kong Exchanges and Clearing (HKEC) made earlier this week. The LSE told the Wall Street Journal that it had "fundamental concerns" about both the offered pricing and HKEC's long-term viability as a financial gateway. 

In a message that left little to the imagination, the LSE board sent a letter to HKEC stating that "the board unanimously rejects the conditional proposal and, given its fundamental flaws, sees no merit in further engagement," the New York Times reported. 

The American Lawyer affiliate Legal Week reported that Slaughter & May was set to represent HKEC in the proposed deal, spearheaded by London-based partner David Watkins, who spent 2011 to 2018 based in Hong Kong for the Magic Circle firm. 

The LSE made headlines in the beginning of August by proposing a deal with Refinitiv, then owned by Reuters and Blackstone Group, for a $27 billion acquisition of the financial data and tracking firm.

That deal, which the LSE said would continue after its HKEC rebuff, attracted its share of legal giants as well, with Freshfields Bruckhaus Deringer representing the LSE, Simpson Thacher & Bartlett advising Blackstone, and Wachtell, Lipton, Rosen & Katz, U.K.-based Allen & Overy and Canadian firm Torys advising Reuters.

The HKEC/LSE deal was a longshot to begin with, according to analysts. Political unrest and the economic uncertainty that accompanies it are present in both the U.K. and Hong Kong, complicating what would have already been a difficult deal given regulatory challenges involved in merging cross-border financial exchanges. 

Although a hostile takeover via an appeal to LSE shareholders remains a possibility, Reuters reported that sources close to the deal at HKEC said a higher offer was unlikely given that the preliminary offer was "just too weak on every fundamental point."

Analysts told the Wall Street Journal that although this particular deal is dead in the water, they do expect the LSE to eventually have either an American or Chinese owner, as the exchange industry continues to consolidate.

Here are some deals that are going to get done: 

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Vertex Pharmaceuticals/Semma Therapeutics

Boston-based Vertex Pharmaceuticals has agreed to purchase Cambridge, Massachusetts-based Semma Therapeutics for $950 million in cash. Semma has pioneered "stem cell-derived human islets as a potentially curative treatment for type 1 diabetes," the company said in a release. Although over 1 million people in the U.S. suffer from type 1 diabetes, it is still considered a "specialty" market, which fits in nicely with Vertex's goal of being a major player in the rare-disease game.

Skadden, Arps, Slate, Meagher & Flom for Vertex/Semma did not respond to requests for comment.

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Lloyds Banking Group/Tesco Bank

Lloyds Banking Group purchased the mortgage business of Tesco supermarket-owned Tesco Bank for $4.54 billion, effectively ending Tesco Bank's run in the mortgage business. Lloyds paid a 2.5 cent premium for the loans, but told the Financial Times that even with the premium, it is more financially sound to purchase Tesco's existing loans than issue new ones given the current market conditions. Lloyds will transfer the former Tesco loans to its Halifax brand. 

The firm for Lloyds Banking Group was not confirmed, but the company has Herbert Smith Freehills, Hogan Lovells, Linklaters and Ashurst on its panel/Allen & Overy for Tesco Bank.

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Prudential Insurance/Assurance IQ

You can never have too much assurance for your insurance. At least Prudential thinks so. Newark, New Jersey-based Prudential Insurance has agreed to purchase Bellevue, Washington-based Assurance IQ, a direct-to-consumer insurance platform, for $2.35 billion. Assurance, founded in 2016, uses advanced data analytics to match consumers of all economic standing with customized insurance solutions.

Debevoise & Plimpton for Prudential Insurance/Wachtell, Lipton, Rosen & Katz for Assurance IQ.

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Tokyo Century/Aviation Capital Group (Pacific Life Insurance)

This is apparently the summer of aviation finance. A week after Apollo Global Management and Athene Holding came to an agreement to purchase PK AirFinance from GE Capital Aviation Services, Tokyo Century has entered the ring. The equipment leasing and specialty financing company has come to an agreement with Pacific Life Insurance to purchase the latter's remaining 75.5% stake in Aviation Capital Group for $3 billion. Tokyo Century purchased a 20% stake in ACG in 2017 and since then upped its stake to 24.5% before finishing the job this week. 

Davis Polk & Wardwell for Tokyo Century/Debevoise & Plimpton for Aviation Capital Group (Pacific Life Insurance).

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Northland Power/Empresa de Energía de Boyacá (Brookfield Infrastructure)

Canadian power company Northland Power has agreed to purchase a 99.2% stake in  Colombian regulated utility Empresa de Energía de Boyacá from Brookfield Infrastructure for $1.05 billion, giving the Toronto-based company an entry into the Colombian marketplace. EBSA is Northland's second investment in Latin America after it started construction on its La Lucha solar project in May.

Latham & Watkins for Northland Power/Baker & McKenzie for Empresa de Energía de Boyacá.

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Alibaba/NetEase Kaola

The Amazon of China beat out Amazon China for a cross-border e-commerce platform in China. Alibaba Group, often referred to as the "Amazon of China," has purchased NetEase Kaola for $2 billion and will integrate the acquisition into its TMall platform, creating the largest cross-border platform in the world's second-largest economy. It was reported earlier this year that Amazon China was in talks to purchase NetEase, but the deal never materialized. 

Neither Alibaba nor NetEase Kaola responded to requests for comment.

In further deal-related news: 

  • Around a dozen unions and advocacy groups have written the Federal Trade Commission and asked the entity to block Abbvie's proposed $63 billion acquisition of Allergan, the maker of Botox. 
  • PE firms Permira and Advent International have proposed a $16 billion purchase of cybersecurity firm Symantec. In August, Symantec sold off its enterprise security business for $10.7 billion to Broadcom.
  • WeWork's IPO keeps getting devalued. Estimated at around $47 billion earlier this year, Reuters reports that now the company is considering a valuation of around $10 billion. The embattled company told Reuters that its "lack of a path to profitability" was a concern for investors.
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