LME recommends £1.4bn HKEx bid
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IRJ - June 15 - Hong Kong Exchanges and Clearing has agreed to purchase the London Metals Exchange for £1.388 billion with the board of LME Holdings set to recommend the cash offer be voted through in July. The transaction is expected to close in the fourth quarter.
HKEx chief executive Charles Li said, “The acquisition of LME Holdings represents a unique opportunity for us to acquire in one stroke a position of global leadership in the commodities market…HKEx brings a unique ability to help the LME grow its business in Asia and, particularly, China and we will capitalise on this to deliver value for all our stakeholders.”
The LME is home to the last open outcry trading pit in Europe and, as a 135-year old exchange, is steeped in historic significance and nostalgia for those familiar with it. HKEx beat out US-based rivals to acquire the LME, which some commentators say represents a gravity shift from West to East.
If the sale goes ahead, it would deliver a windfall to the banks and brokers who own the metals exchange. At a valuation of £1.4bn, J.P. Morgan would receive £151m for its shares, Goldman Sachs would get £132m and the Bagri family, owners of Metdist, would receive £130m, according to the Financial Times.
Commenting on the transaction, Martin Abbott, chief executive of the LME said, “This proposed combination will secure the future of the LME for its next 135 years. The LME's global benchmarks plus HKEx's pre-eminent market position in Asia, its IT and trading resources and clearing expertise will cement the LME's position as the world's foremost base metals trading venue.”
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