Blackstone’s continued divestment of its stake in capital markets and data company London Stock Exchange Group PLC (LSE:LSEG) is serving as a “positive catalyst for LSEG shares”, according to UBS analysts.
Announced today, Blackstone is set to finalise its third round of LSEG share disposals through the sale of 43.1 million shares, thereby reducing Blackstone's total ownership in LSEG to 10.7%, down from 18.4%.
This reduction in ownership means Blackstone will relinquish one of its two seats on the LSEG Board, as its stake falls below the 17.5% threshold.
This “not-so-surprising placement”, as UBS described it, has a noteworthy upside, given that it further reduces the share overhang of LSEG’s name.
UBS noted that the previous two placements, conducted in March and May, preempted a swing higher on LSEG stock.
Analysts believe Blackstone’s ongoing divestment will gain pace, with LSEG’s board potentially agreeing to push existing lock-up periods forward from January 2025 to March 2024.
If true, this suggests LSEG’s board has confidence that the upside potential of the group will sufficiently absorb the impact of another large share disposal by Blackstone.
“The first two LSEG stake sales by the Blackstone Consortium were resounding successes as both placements were larger than initially indicated due to strong demand from investors,” noted Blackstone.
UBS has a buy rating on LSEG shares with a 9,800p price target against a publication price of 8,198p.