THE LONDON Metal Exchange (LME) board examined non-binding bids for the world’s biggest marketplace for industrial metals yesterday, but a partial climbdown on plans to charge a controversial new trading fee could threaten the sale.
Some potential buyers have been watching how the LME deals with the dispute over the fee, as revisions are expected to dent projected extra revenue included in the valuation given to bidders.
The 135-year-old institution, where metals including copper, aluminium, nickel and zinc are traded by open outcry as well as electronically, said it would delay introduction of the new fee from the previously announced March 1st until July 2nd. It will also scrap it for certain heavily traded spreads.
Analysts and industry sources had valued the exchange at £500 million to £1.5 billion based on expectations of higher earnings boosted by the fee, new products and its plans to build its own clearing business. A rare public spat between users of the exchange and the LME over the fee it revealed in December forced it to go back to the board and review objections. – (Reuters)
