LME considers bids for bourse
THE board of the London Metal Exchange (LME) yesterday considered bids for the world’s biggest industrial metals marketplace.
But a partial climb-down on a controversial new trading fee it had planned to charge users could make it less attractive to suitors and threaten a potential sale.
Around 80 per cent of the world’s metal futures are traded on the 135-year-old exchange, which has seen its profits boom as commodity prices soared, attracting interest from potential buyers.
CME Group, Hong Kong Exchanges and Clearing, NYSE Euronext and the InterContinental Exchange are all reported to be interested.
But with revenue of only £50m last year it was thought the introduction of the new fee was the main driver behind a potential £1bn valuation.
In a statement the board of LME said they had “considered points raised by members” and would delay implementation of the new fee until July, as well as deciding it “will not apply to short-dated carries”.
The LME operates on a constrained-profit model and has so far kept fees low for the trading houses and banks that own the exchange and use the market.
These members would enjoy a windfall in the event of a sale but they would also have to surrender some control over future fees policy.
An exchange spokesman declined to comment on bids for the firm, merely saying that the consultation on the sale “is continuing”.