The London Metal Exchange has created its own clearing service, a move traders claim will make the exchange more attractive to potential suitors.
By Jamie Dunkley
11:19PM GMT 19 Dec 2011
Trades at the LME, the world’s largest industrial metals exchange, are currently cleared through LCH.Clearnet. The decision to create LMEClear means the 130-year-old exchange will have greater control over new product development and more leverage in any potential sale.
“Shareholders will be asked to consider the value of the business at some point in 2012, and it is important that they are able to compare incoming bids with the true value of the business,” LME chief executive Martin Abbott said.
“The introduction of the Exchange User Fee will allow the LME to operate commercially and to provide a commercial return to its shareholders while still operating a low-cost service,” he added.
The LME said it would now begin the next steps of setting up LMEClear, including a tender process for suppliers of technology and treasury services and completion of the financing.
ICAP is among the companies considering making a bid for the LME.
In September, Michael Spencer, the company’s chief executive, described the LME as being “very very interesting” amid reports the exchange had received approaches from more than nine suitors, valuing it at about £1bn.