The future of the 321-year-old London Stock Exchange was thrown into turmoil on Wednesday when a shock £32 billion takeover bid from Hong Kong suddenly emerged.

Hong Kong Exchanges said the cash and shares offer was “a highly compelling strategic opportunity to create a global market infrastructure group, bringing together the largest and most significant financial centres in Asia and Europe”.

Chief executive Charles Li said the deal would “redefine global capital markets for decades to come”.

He added: “Together we will connect East and West, be more diversified and we will be able to offer customers greater innovation, risk management and trading opportunities.”

With the pound low and Brexit tensions high, the latest attempt to take over one of the City of London’s most prized assets will be hugely contentious, commercially and politically.

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Rival exchanges from Sweden, Germany, Canada and the US have tried — and failed — to acquire the LSE in the past 20 years.

While Hong Kong insisted the offer— of 2,045p in cash and 2.495 newly issued HKEX shares — was not hostile, it is plain the LSE had not accepted the 8,361p a share deal.

Tensions between Hong Kong and China are hardly likely to persuade Parliament that this deal is without risks.

LSE shares jumped 7% to 7260p as the news emerged, valuing the business at £25 billion. That huge gap between the market cap and the Hong Kong bid reflects considerable uncertainty that the deal will go through.

Last month LSE said it would buy data group Refinitiv, a £12 billion deal that would turn the LSE into a technology giant that could serve investors across the globe. The move by Hong Kong would bust up that deal.

The move set the City alight. One broker said: “Didn’t see this coming. The last attempt by the Germans turned into a regulatory fist fight. Let’s see how it pans out.”

Hong Kong has already made inroads into the Square Mile, buying the London Metal Exchange for £1.4 billion in 2012. While it tried to present the move as a vote of confidence in the UK and the City, critics are likely to argue that a prime British asset should not come under the control of foreign powers.

The LSE seemed initially dismissive, merely noting that HKEX has made an “unsolicited, preliminary and highly conditional proposal”.

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