By Alex MacDonald
LONDON--The sale of the London Metal Exchange to Hong Kong
Exchanges and Clearing Ltd. (0388.HK) wasn't simply about price, it
was about the finding the right fit, the chairman of the
135-year-old base metals exchange said
Hong Kong Exchanges made an all-cash offer worth 1.388 billion
pounds ($2.24 billion) for the LME and received approval from
shareholders representing 99.63% of LME shares in July, marking a
record acceptance rate under the U.K. Companies Act, LME Chairman
Sir Brian Bender told an audience at LME's annual dinner event
Tuesday.
The vote followed a lengthy bidding process for the LME, which
saw the Asian exchange beat off tough competition from other major
exchanges, including CME Group Inc. (CME), NYSE Liffe--the
London-based derivatives arm of NYSE Euronext (NYX)--and
IntercontinentalExchange Inc. (ICE).
Sir Bender said the deal "wasn't simply a matter of the price."
The board wanted any offer to pass several tests before it would be
willing to recommend an offer.
The board sought assurances that the LME would be kept in London
and remain regulated by the Financial Services Authority. Its
members also wanted assurances that bidders would keep those
features of the LME business model, such as its links to the
physical market, that they considered most important to users and
to the integrity of the market. Finally, they were interested in
the bidder's growth strategy.
"The overwhelming support our shareholders gave to the offer
from HKEx shows that they considered that it provided compelling
answers on all points," he said.
The deal is currently being considered by the FSA, and is
forecast to close later this autumn, Sir Bender said.
Write to Alex MacDonald at alex.macdonald@dowjones.com
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