Banks 'to stand in way of LME sale'
It may not be in the interest of banks to allow the London Metal Exchange to be sold, it has been highlighted.
Banks are reported to be considering standing in the way of the sale of the London Metal Exchange (LME), which could see companies using negotiation strategies to block the move.
Reuters cited senior industry sources, who said it would not be too difficult for financial service firms with stakes in the LME to stop it from being purchased.
It is not good for banks if the LME were sold to any of the ten potential bidders the exchange reported were showing interest in November, as they are worried the profits they make from warehousing could be dented by a new management with more stringent regulations.
The insiders said a 25.1 per cent stake could block a sale and it would not be hard to find support to build this obstacle.
"I've heard a number of people say, 'It doesn't matter what the price is, it's my business model that's the issue'," the head of a ring dealing LME member told the news provider.
The LME was established more than 130 years ago and handled volumes worth $11.6 trillion (£7.4 trillion) in 2010.
Posted by David Gleck
Source: Reuters, January 3rd