London Stock Exchange confident Refinitiv deal will deliver

LONDON (Reuters) – The London Stock Exchange Group is confident the integration of its $27 billion deal for Refinitiv, a data and analytics company, will pay off for the bourse despite recent challenges, Chief Executive David Schwimmer said on Friday.

“We’re in a strong financial position,” Schwimmer told an online investor event. “We remain confident in achieving financial targets that we set out when we announced the transaction.”

So far “run rate” savings of 40 million pounds ($55 million) have been made as integration progresses, and debt has been cut by 4 billion pounds, he said.

The LSE’s acquisition of Refinitiv turned the exchange into the second largest financial data company after Bloomberg LP.

In March LSE shares tumbled from around 9,300 pence to just over 8,000 pence as details emerged of costs for upgrading the Refinitiv platform. The stock was trading at 7,888 pence on Friday, up 0.1%, having pared gains slightly since the investor event began.

Refinitiv’s flagship terminals have been hit by several outages, which Schwimmer said were not due to the underlying product.

“These kinds of issues, outages, are absolutely unacceptable to our customers, unacceptable to us. We know how to address them, and we are very much doing that,” Schwimmer said.

LSEG was continuing an investment programme in Refinitiv and its terminals begun by its previous owner, U.S. private equity firm Blackstone, Schwimmer said.

The terminals are used by traders and investors to access data and market-moving news.

“We have a high level of confidence that we will deliver revenue growth across data and analytics of 4-6% per annum over the medium term,” Schwimmer said.

The exchange said in April it was on track to achieve 25% of an announced 350 million pound savings target by the end of 2021, with guidance on 850 million pounds in capital expenditure and 150 million pounds in operational costs for 2021 also unchanged.

“This business has momentum,” said Andrea Remyn Stone, the former Bloomberg executive who became LSEG’s Group Head of Data & Analytics on Thursday, replacing David Craig, former Refinitiv CEO.

REUTERS TALKS

Schwimmer said the LSE was still in discussions with Reuters News over the two groups’ agreement to distribute news content, following a dispute earlier this year over whether Reuters News could put up a paywall on its website.

Reuters News is paid about $325 million a year by the LSE for news under a deal agreed with Refinitiv before it was taken over by the exchange.

“We have a good ongoing relationship and good ongoingdiscussion with Reuters,” Schwimmer said, declining to comment further.

Stone said news is “essential” to its business proposition and it views the relationship with Reuters as “core”. She added that LSE Group uses Reuters in every product it has.

A spokesperson for Reuters News had no immediate comment on the talks.

Thomson Reuters, the parent company of Reuters News, holds a minority stake in the LSE following the Refinitiv deal.

Costs and capital expenditure will be updated next month when the exchange reports results.

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