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Rating:Here's How the LSE Will Finance the Russell Deal Not Rated 0.0 Email Routing List Email & Route  Print Print
Wednesday, August 27, 2014

Here's How the LSE Will Finance the Russell Deal

News summary by MFWire's editors

So, the London Stock Exchange beat out six other competitors in June to buy Russell Investments for $2.7 billion to make a splash in American indexing products.

Reuters reports that the stock exchange operator will raise the equivalent of $1.6 billion in its first rights issue of new stork to partially fund the purchase. The other $1.1 billion will be paid for with existing bank debt facilities, according to the newswire.

The LSE often makes creative use of stock swaps and so on to make deals, allowing for its aggressive growth over the past few years.

Reuters further reports that the rights issue was underwritten by Barclays, RBC Capital Markets, Deutsche Bank, JP Morgan Cazenove, Banca IMI, Banco Santander , HSBC and Mitsubishi UFJ Securities. It is expected to complete by the end of September.

According to Reuters, the deal will result in an indexing powerhouse benchmarking $9.2 trillion in assets. The newswire reports that the LSE gave no update on what it plans to do with the asset management and investment consulting arms of Russell. When the deal was announced, the LSE stated that is was conducting a review of these businesses, which will like be completed by the end of the year.

When the deal was first announced, MFWire looked at the buying opportunities the deal could present, although Russell's asset management and consulting businesses wouldn't be a fit for many firms

Edited by: Tommy Fernandez

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