LME knocks CME out of takeover bidding

The London Metal Exchange on Tuesday said it had narrowed discussion on a potential takeover acquisition to two bidders and sources close to the process said CME Group was the latest bidder to be eliminated.

A bid by NYSE Euronext had been eliminated earlier this month, reportedly after its bid came in well below the more than $1.6 billion exchange board members are now negotiating to get from a possible buyer.

Only Intercontinental Exchange and Hong Kong Exchanges and Clearing Ltd. are now said to be continuing talk with the exchange. A spokeswoman for the exchange declined to confirm the identities of bidders that had been eliminated or who remained in talks and a spokesman for the CME had not responded to a request for comment.

The LME issued a statement saying that the exchange chairman had updated shareholders on the sale process and that the LME board was continuing “discussions with two parties” on their proposals for purchase of the London exchange.

Those discussions “will involve obtaining a detailed understanding of their plans for the future governance and operation of the market and the deliverability of their respective proposals, as well as the value offered. This process will continue over the coming weeks and shareholders will be provided with further information as appropriate.”

At least 75% of the LME’s 34 voting shareholder companies and 50% of the 92 members of the exchange must support a sale for it to go forward. Moelis & Co., the U.S.-based investment bank is advising the LME on the sale.

Originally published on Resource Investor. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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