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Hong Kong Bourse Studies Bidding for London Metal Exchange

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Source: Bloomberg

Hong Kong Exchanges & Clearing Ltd, Asia’s largest bourse operator, said it is studying a bid for the London Metal Exchange as growth slows and it seeks to build up a commodities business.

The exchange said Monday that it was “one of a number of interested parties” studying the opportunity to buy LME, the world’s largest metals trading platform. The bourse will consider additional financing if needed, it said.

An acquisition of the 135-year-old metal bourse could help jump start Hong Kong Exchanges’ overseas expansion after it was topped this year as the world’s largest market company by CME Group Inc as large initial public offerings from China slow. Hong Kong Exchanges is seeking an acquisition loan of as much as US$3 billion to back a possible bid for the London Metal Exchange, or LME as it is known, two people familiar with the matter said April 12.

“This opportunity isn’t going to wait for them,” said Sam Hilton, a Hong Kong-based analyst at Keefe Bruyette & Woods Asia whose coverage includes Asian exchange companies. “Hong Kong Exchanges’ cash equities business is a mature business and that’s the reason why they’re moving into new asset classes.”

Shares of Hong Kong Exchanges are unchanged this year, compared with a 9.3-per cent gain in Singapore Exchange Ltd. Chicago-based CME has advanced 10.1 per cent this year to date.