Feb 26 (Reuters) - London Stock Exchange Group said on Thursday it plans to buy back a further 3 billion pounds ($4.07 billion) of shares over the next 12 months as the company comes under pressure
LSEG's $4.1 Billion Buyback Sparks Investor Optimism
By Charlie Conchie and Yadarisa Shabong
LONDON, Feb 26 (Reuters) - London Stock Exchange Group investors are eyeing the potential for more share-boosting moves from the company after welcoming its plan to launch a 3 billion pound ($4.1 billion) share buyback, amid pressure from activist investor Elliott Management.
Investor Reactions and Market Impact
The buyback plan helped LSEG shares end the day up more than 9%, their highest since late January and almost erasing this month's AI-related selloff. The share repurchase plan is the company's biggest ever and the group also raised its profitability forecasts.
New York-based Elliott, which recently emerged as an LSEG shareholder, is pressing CEO David Schwimmer to review LSEG's portfolio, lift margins that trail rivals, and better communicate its resilience to AI threats, a person familiar with the matter has told Reuters.
Shares in LSEG, home to the London Stock Exchange, had lost around 30% of their value in the past year as of Wednesday as the data and exchanges group was hit by concerns that AI will impact its business.
Response to Activist Shareholders
LSEG executives said the buyback was not a response to Elliott and the group had no plans for asset sales.
Frederick Kerr-Smiley, analyst at Ninety One, a top-20 LSEG shareholder, welcomed the buyback and more combative tone from Schwimmer towards the threat posed by AI.
"We were definitely keen for them to do a chunky buyback," he said. "I love it when an activist comes in, it's really helpful," he added.
Analyst and Shareholder Perspectives
Analysts welcomed the news, which included a boost in guidance on earnings and revenue and declining capital expenditure.
Some shareholders want to see more from LSEG.
"We welcome the buyback but you don't invest in LSEG because you hope for buybacks and a dividend. We want growth," said Stephen Yiu, chief investment officer of the Blue Whale growth fund, an LSEG shareholder.
"It will have bought them time with Elliott but the clock is ticking and you can expect Elliott will come through more forcefully if LSEG doesn't deliver in the next few quarters."
The company could increase the buyback if they have not bought anything by the third quarter, Kerr-Smiley said.
Schwimmer has dismissed the risk that AI models will replace its data business, arguing LSEG's datasets are proprietary.
He told journalists on Thursday that it was "verging on impossible" for AI to replicate them, and said LSEG expected to sign more AI partnerships this year and beyond.
It has already struck deals with OpenAI and Anthropic that allow their users to access and interrogate its data.
Financial Performance and Growth Projections
GROWTH IN SUBSCRIPTION VALUE SLOWS
LSEG said total income grew 7.1% in 2025 on an organic basis, excluding recoveries, in line with expectations in a company-compiled poll.
It forecast 2026 total income growth of between 6.5% and 7.5% on the same basis. Analysts had expected about 6.7% growth on average, according to the poll.
Annual subscription value (ASV), a closely watched metric, rose 5.9%, slightly ahead of expectations but down from 6.3% last year.
"The positive message around momentum within the business should also help sentiment, and perhaps clear some of the fears of AI disruption that have impacted the stock over the previous months," JPMorgan analysts said.
Schwimmer said in a statement that LSEG was "very well positioned for continued growth".
Reuters provides news for LSEG's news and data terminal, Workspace, and other products.
LSEG also raised its dividend by 15%.
($1 = 0.7436 pounds)
(Reporting by Charlie Conchie in London and Yadarisa Shabong in Bengaluru. Writing by Anousha Sakoui. Editing by Tommy Reggiori Wilkes, Mark Potter and Jane Merriman)
