United Kingdom/China – The board of LME Holdings has recommended all shareholders to vote in favour of a cash offer by which HKEx Investment of Hong Kong would acquire its entire issued and outstanding share capital. This implies a total value of US$ 2.1 billion based on 12.9 million ordinary shares.
The transaction is seen as ‘bringing together the London Metal Exchange, the world’s leading non-ferrous base metals exchange trading venue, with the leading operator of exchanges and clearing houses in Asia’. By leveraging HKEx’s resources, infrastructure and network, the board additionally sees an opportunity to ‘provide a platform for significant long-term growth’ in operations in Asia and the Chinese market.
According to the LME, this can be achieved while preserving its ‘unique business model’, including the operation of its open outcry trading, daily prompt date contract structure and capacity for warehousing and physical delivery.
Martin Abbott, Chief Executive of LME Holdings and the LME, believes that the proposed combination will secure the future of the LME for its next 135 years. He adds: ‘The LME’s global benchmarks plus HKEx’s pre-eminent market position in Asia, its IT and trading resources and clearing expertise will cement the LME’s position as the world’s foremost base metals trading venue.’
Charles Li, Chief Executive of HKEx, says: ‘The acquisition of LME Holdings represents a unique opportunity for us to acquire in one stroke a position of global leadership in the commodities market. This is consistent with our strategy to expand beyond equities and equity derivatives, and offers significant opportunities for revenue growth.’
For more information, visit: www.lme.com and www.hkex.com