LSEG unveils biggest-ever buyback as firm fends off Elliott and AI threat
The operator of the London Stock Exchange has unveiled its biggest-ever buyback as the company fends off the dual threats of activist investor pressure and shareholder fears over the rise of AI.
LSEG said it would buy back at least £3bn of shares over the next twelve months, adding to the £2.1bn buyback carried out in 2025, in a move which wooed shareholders and sparked a more than six per cent share jump to 8,276p in Thursday morning trading.
The FTSE 100 firm reported a near-60 per cent jump in pre-tax profit for the year to £2bn, with revenue rising 5.8 per cent to £9bn.
LSEG shares suffered a sharp sell-off earlier in the year, with the stock slumping by more than 10 per cent as the company was caught up in a wider sell-off of tech stocks amid renewed investor anxieties that their services would be usurped by new tools from the big AI companies.
The data and analytics business has also come under pressure from activist investor Elliott, which recently built up a major stake in the company, raising concerns it would be urged to shift its listing from London to New York and spin off the London Stock Exchange operation into a separate business.
Elliott has reportedly privately assured the UK government that it would not force a break-up of the group.
In a media call, LSEG chief financial officer Michel-Alain Proch insisted that the record buyback was not a maneuver aimed at appeasing Elliott, adding that the decision “had nothing to do” with when the board became aware that the activist investor had built up a significant stake.
After being asked whether the arrival of Elliott “sent a shiver” down executive spines, chief exec David Schwimmer said: “We have had plenty of discussions with shareholders whom I would describe as ‘active’ and this is a healthy part of the capital markets.
“So I would say we welcome constructive engagement with all shareholders, and we are trying to do the right thing through all our shareholders.”
Dan Coatsworth, head of markets at AJ Bell, said: “LSEG looks to be in defensive mode after becoming the target of activist investor Elliott.
“The tone of its results is one of a business trying to convince the market (and Elliott) that it is doing much better than its share price would suggest.
“Dangling a new £3 billion share buyback carrot in front of investors is certainly one way to get them on side, but Elliott might view that as only the first in many steps to get the shares moving up again. The drama is only just beginning.”
More Pisces candidates to join platform ‘imminently’
More firms are set to join the Pisces private market platform “imminently”, according to LSEG, as it sought to drum up interest in its new securities venue.
“We are in active discussions with market participants looking to use the venue imminently,” LSEG said, adding that the new platform, for which they received regulatory approval last year, “will expand the options available to private companies and their shareholders, including employees, to access liquidity and provide investors with the opportunity to invest in the next generation of high-growth private companies”.
But Schwimmer refused to set out the pipeline of prospective Pisces sign-ups, nor did he give any indication of how many businesses he expected to be part of the market by the end of the year.
Last week, a vehicle containing shares in a £1.3bn venture capital firm that backs tech spin-outs from Oxford University was confirmed as the first organisation to use the new Pisces private stock market.