UPDATE: Final Bidders For LME To Present Thursday To Board-Sources
31 Maggio 2012 - 9:56AM
Dow Jones News
The London Metal Exchange's board is to hear presentations
Thursday from teams including the chief executives of the two final
bidders in the race to buy the metals-trading exchange, after which
the board could choose its preferred bidder by as early as the end
of the day, people familiar with the matter told Dow Jones
Newswires.
The 135-year-old London Metal Exchange accounts for at least 80%
of global metals trade and is Europe's last open-outcry trading
floor.
Jeff Sprecher, CEO of IntercontinentalExchange Inc. (ICE), and
Charles Li, CEO of Hong Kong Exchanges and Clearing Ltd. (0388.HK),
are both in London to try to convince the board of the merits of
their proposals to buy the LME, the people said.
The board will then evaluate the presentations, and could make a
decision later Thursday, although further meetings could take place
before the preferred candidate is chosen, the people said.
The LME, ICE and Hong Kong Exchanges declined to comment.
After the board makes its decision, shareholders in the
LME--which are also its members--will vote at an extraordinary
general meeting on whether or not to sell their shares. The date of
this meeting hasn't yet been announced.
Lobbying of LME members by representatives of ICE and Hong Kong
Exchanges this week has been frenzied, with back-to-back meetings
taking place as the two rivals sought out as many shareholders in
the LME as possible ahead of the board meeting. Feedback from
members to the LME board is being made via the exchange's adviser,
global investment bank Moelis & Co.
The two bids are similar in their commitment to keeping the
LME's business model intact, but differ in the detail of how they
plan to grow the business of the exchange.
ICE is emphasizing its strengths of turnkey clearing,
modernisation and integration of acquired businesses, and
developing new cleared products that can be pushed out to the wide
user-base of its global platforms, people familiar with the bids
said.
Hong Kong Exchanges is selling its close links with China and
the benefits this will have in facilitating new members and users
as well as warehousing in the Asian country, the world's largest
consumer of metals like copper and aluminum. Hong Kong Exchanges is
also planning to develop a bespoke clearing platform specifically
for the LME business, the people said.
Rival exchanges CME Group Inc. (CME) and NYSE Liffe, the
London-based derivatives arm of NYSE Euronext (NYX), were
eliminated from the process to buy the LME at earlier stages
throughout May.
The value of the bids has taken more of a backseat of late as
the two remaining parties had exceeded the GBP1 billion the LME had
privately targeted, people familiar with the matter said.
Firm bids for the LME were first received May 7, with Moelis and
the LME bid committee--made up of Chairman Brian Bender, Chief
Executive Martin Abbott and board directors David Rough and Nat le
Roux--viewing them that week. The LME board had its first meeting
to discuss the bids May 10.
Any sale needs approval from 75% of shareholder votes and 50% of
LME members.
The exchange reported net profit of GBP7.68 million in 2011,
down 19% from GBP9.45 million in 2010.
-By Andrea Hotter, Dow Jones Newswires; +44 (0)20 7842
9413;andrea.hotter@dowjones.com
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