Elliott Management Acquires Stake in London Stock Exchange Group

Elliott Management's Stake in LSEG

By Charlie Conchie

Impact of AI on Financial Performance

LONDON, Feb 11 (Reuters) - Activist investor Elliott Management has built a stake in the London Stock Exchange Group and is engaging with the financial data and analytics group to improve its performance, a person familiar with the matter told Reuters on Wednesday.

Previous Activist Campaigns

Shares in LSEG were up 2.7% at 1000 GMT, having fallen by more than 35% in the past 12 months, including a selloff last week that wiped nearly $1 trillion off the value of global software stocks.

Elliott's exact shareholding was unclear. The fund has been in talks with LSEG to help drive an improvement in its performance, encourage a fresh share buyback and close margin gaps with rivals, the source said, confirming details first reported by the Financial Times.    

Elliott and LSEG declined to comment when contacted by Reuters, which provides news for LSEG's news and data terminal Workspace.

DATA RACE

LSEG, which also operates the London Stock Exchange, has been battling concerns that rising competition and artificial intelligence will squeeze its income, a worry also plaguing the broader software and services sector.   

The company's 2019 acquisition of Refinitiv brought major financial data and analytics under LSEG's umbrella.

The company has been working rapidly to embrace AI and distribute its licensed data more widely through platforms, including OpenAI's ChatGPT and Anthropic's Claude, as financial services firms race to adopt generative AI tools that can quickly analyse vast amounts of market information.

"Within the Diversified financial sector, the impact of AI concerns has been felt hardest to date by the Exchange sub-sector as the scope and scale of data and analytics review have come into focus," Barclays analysts said in a note.

"We think the de-rating is overdone, in particular for LSEG," they added. 

The FT reported that Elliott does not want LSEG to consider a full sale or a spin-off of its stock exchange business.     

PREVIOUS CAMPAIGNS

The call for change at LSEG by Elliott follows a failed attempt in 2017 by activist investor TCI to oust the data group's chairman. TCI cut its stake about a year later.

Elliott is one of the world's busiest activist investors, and with assets under management of about $80 billion, it has built a reputation as a relentless activist. 

Its other campaign targets include oil major BP, Lululemon Athletica and PepsiCo, where it reached a settlement in December that will include cost cuts and other changes. It is also an investor in Anglo American.  

(Reporting by Charlie Conchie, Anousha Sakoui and Indyk Samuel in London, and Pushkala Aripaka and Devika Nair in Bengaluru ; Editing by Rashmi Aich, Subhranshu Sahu, Toby Chopra and Elaine Hardcastle)