Reuters: Mergers News: ICE, HKEx seen likely to raise offers for LME

Reuters: Mergers News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

ICE, HKEx seen likely to raise offers for LME Jun 6th 2012, 14:08 Wed Jun 6, 2012 10:08am EDT * ICE, HKEx still in running for LME - sources * LME board to look at new offers on Thursday * Board to mull bids before recommending one to shareholders By Susan Thomas and Veronica Brown LONDON, June 6 (Reuters) - The two remaining suitors for the London Metal Exchange (LME) will resubmit proposals on Thursday and are likely to raise their bids in the final stages of a contest to buy the world's biggest metals marketplace, sources close to the situation said. The content of bids by InterContinental Exchange and Hong Kong Exchanges and Clearing are similar, the sources have told Reuters. Both have pledged to keep the LME's unique composition unchanged for now, including its warehousing network, complex prompt-date structure and open outcry trading. Trading on the LME sets global benchmark prices for six base metals. That has increased the prospects the two bidders will be asked to refine the proposals, which sources have said are already around 1.2 billion pounds ($1.84 billion). "One would anticipate there will now be a bit of finessing of the bids," one source close to the process said on Wednesday. "It will be best and final offers at this stage, and then it will move forward to a recommended bid, once the LME has decided what they want to do." A second source with knowledge of the matter said both exchanges were still in the running. ICE and HKEx were shortlisted after the exit of CME Group and NYSE Euronext in recent weeks. "As far as I know both parties are keen to continue, and I can't see any change to that ahead of the bidding deadline," the source said. The new submissions will be scrutinised by the board on Thursday, the day before the 135-year old exchange holds its annual general meeting, but a final recommendation is not expected to be made to shareholders at that meeting. The board is expected to have a period of consideration before any final bid is put to shareholders, the sources said. Voting on the sale will take place at an extraordinary general meeting. The LME declined to comment. Members, including JPMorgan Chase & Co and Goldman Sachs & Co, need to weigh the advantages of receiving a lump sum payment of millions of dollars for their shares versus maintaining the LME as a member-owned exchange. Any potential buyer would need to secure 75 percent of ordinary shares as well as win approval from 50 percent of shareholders. With its main European energy market and an established clearing house in Britain, the LME would be a logical fit for Atlanta-based ICE, Thomas Farley, president of ICE Futures U.S., said earlier this year. HKEx's access to China, the world's largest copper consumer accounting for 40 percent of global demand, makes it an attractive suitor, industry observers have said. The LME has long sought to win approval from Chinese regulators to list its warehouses nearer customers in the country. Its last effort was rebuffed three years ago. LME Chief Executive Martin Abbott wants to build an in-house clearing operation and raise fees if the exchange is not sold. Link this Share this Digg this Email Reprints

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