Shares in London Stock Exchange Group surged 10 per cent after the approach was revealed but settled back at 5 per cent up by lunchtime.
She added: "We believe a combination of HKEX and LSEG represents 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".
Five weeks ago, LSE also announced a surprise GBP 22 billion merger with data group Refinitiv, part of Thomson Reuters - but HKEX says its offer is dependent on the scrapping of the LSE-Refinitiv deal.
"This is not helpful".
HKEX was forced to halt trading only last week, blaming a software bug for disruptions.
But this year it has fallen behind, raising $10.8 billion to the NYSE's $20.2 billion, with activity suffering as the political turmoil deepened.
A successful Hong Kong bid for the LSE would sabotage Blackstone's lucrative deal to sell Refinitiv.
Both firms have been involved in exchange merger deals in recent years, with LSE failing in its attempt to combine with Deutsche Boerse AG and HKEX acquiring London Metal Exchange in 2012 for 1.4 billion pounds.
LSE recently agreed to pay $27 billion for data company Refinitiv, which the LSE said today it is committed to.
The Asian exchange, however, said it was confident the takeover faced no major regulatory hurdles due to little overlap in markets.
In terms of future governance, HKEX says it has begun conversations with certain regulators in the United Kingdom and Hong Kong and looks forward to discussing the transaction in detail with LSEG and all relevant regulatory bodies.
"Following early engagement with LSEG, we look forward to working in detail with the LSEG board to demonstrate that this transaction is in the best interests of all stakeholders, investors and both businesses".
It is expected that key LSE management would continue to operate LSE businesses, HKEX said.
The Hong Kong government threw its support behind the move.
The UK Treasury declined to comment on commercial matters.
In a lengthy statement, HKEX said that they are in talks with regulators and LSEG officials as to how the company would be structured if they do complete the acquisition. It said it meant to apply for a secondary listing of its shares on the LSE once the deal has gone through.