JP Morgan has bought a 4.7% stake in the London Metal Exchange from US brokerage MF Global, Economic Times reported.
This acquisition would make JP Morgan the exchange’s largest shareholder post acquisition. The US investment bank will pay 25 million ($39.1 million) pounds for the stake in the world’s largest metal market, the reports said, implying a total value of around 350 million pounds for the operator.
The announcement would come as early as this week. The sale to JP Morgan could shift the odds in the takeover battle for the LME, one of the few exchanges to still operate an open outcry ring, which has thrown its doors open to a potential 1 billion pound takeover.
The US investment bank which already holds a 6.2% in the LME, declined to comment. JP Morgan will also purchase the B-shares held by MF Global for 2 million pounds , the sources said.
Last Wednesday, industry sources said that MF Global’s ring dealing seat on the LME will be bought by U.S.-based broker INTL FCStone. Selling the stake will be a boost for creditors of the futures brokerage, which filed for bankruptcy protection last month, and for its clients, some of whom have seen their positions frozen ever since.
The shortfall of customer funds at MF Global may be around $1.2 billion, about double initial estimates from regulators, the trustee liquidating company said. JP Morgan is the world’s leading global investment banks.
The clients include corporations, governments, states, healthcare organizations, educational institutions, banks and investors in more than 100 countries.
