[miningmx.com] — THE London Metal Exchange has several serious potential bidders and will consider takeover proposals at its board meeting in late February, Chief Executive Martin Abbott said on Thursday.
The world’s top market for industrial metals, which received initial takeover approaches in September, has been sending out detailed financial data to suitors in recent weeks.
“There is a very healthy number of potential bidders,” Abbott told a news conference. “We want to show initial bids to the board on February 23.”
He did not say how many parties were interested in buying the 130-year-old exchange, but a source with knowledge of the matter told Reuters on Wednesday that 15 suitors had expressed interest.
Metal industry sources have said the LME, which accounts for 80% of global futures activity in industrial metals, could be worth as much as 1 billion pounds ($1.5bn).
The LME published annual data showing volume jumped 22% last year to a record 146.6 million lots and the value of trades surged 32.8 percent to $15.4 trillion.
Potential buyers may include CME Group Inc, IntercontinentalExchange and UK-based broker ICAP , analysts and industry sources have said.
Singapore Exchange, the Hong Kong Mercantile Exchange, the London Stock Exchange, and Deutsche Boerse-owned Eurex have also been mentioned.
FEES HIKE
Abbott also told a news conference that the exchange would listen to objections to a hike in trading fees but “there was no provision to rescind the decision”.
The LME is facing a backlash by members after it said last month it planned to introduce an exchange user fee.
The LME, one of the last bastions of open-outcry trading, has traditionally kept fees low for its member-owners.
“We will be sufficiently resourced to fight off future competition with the new fee structure. We don’t anticipate raising fees further,” Abbott said.
Critics of the new fees have said the LME is seeking to boost revenues to make it more attractive to potential bidders.
Opposition has been growing to a possible sale. Industry sources have said top bank stakeholders are likely to amass enough support to block a sale they fear will bring a more heavily regulated owner and hurt their lucrative warehousing businesses.
As a member-owned organisation, the exchange requires approval from members holding 75% of outstanding ordinary or “A” shares for any sale.
