The activist hedge fund wants a £5bn buyback, a cost overhaul, and a full portfolio review. A new UBS analysis says the maths mostly works, but management will fight back hard
Elliott Management's emergence as a shareholder in London Stock Exchange Group PLC (LSE:LSEG) has set up one of the more interesting confrontations in UK financial services this year.
The activist firm is pushing LSEG's management on three fronts: accelerate share buybacks to £5bn in 2026, squeeze more from the cost base, and conduct a root-and-branch portfolio review. UBS analysts have tried to work out what is genuinely achievable across each demand.
The short answer: more than management's current guidance implies.
Buybacks are the easy part
On repurchases, UBS thinks £5bn is comfortably within reach. The bank forecasts LSEG will generate around £2.65bn in equity free cash flow in 2026, with the remainder fundable from the balance sheet. A £5bn buyback would push the net debt-to-EBITDA ratio to roughly 2.2 times, still inside management's stated 1.5 to 2.5 times target range. UBS calculates LSEG could theoretically allocate as much as £7.5bn to repurchases in 2026 without breaching its own leverage ceiling.
Costs have room to move
LSEG's management targets 50 to 75 basis points of EBITDA margin expansion in 2026. UBS forecasts 100 basis points; consensus sits at 80 basis points. Both exceed the company's own implied guidance. The analysts point to a zero-based budgeting system introduced in 2025 and significant scope to use AI internally to automate workflows as structural tailwinds that could support an upgrade to guidance.
The portfolio question is harder
UBS identifies 4 businesses it believes could be sold without serious operational disruption: FTSE Russell, Risk Intelligence, LSEG's 51% Tradeweb stake, and the London Clearing House. The combined estimated market value of those assets is £35.8bn, against LSEG's current market capitalisation of £35.0bn.
Management will resist. Their case is that LSEG's diversity delivers revenue stability across economic cycles, that synergies between businesses underpin large enterprise contracts, and that divesting the most attractively-valued assets does nothing to address the AI overhang that has already hit the share price hard.
LSEG reports full-year 2025 results on Thursday. It will be the first real test of how management intends to respond.