JP Morgan to buy London Metals Exchange stake

JP Morgan will soon announce it has bought a 4.7 per cent stake in the London Metal Exchange from defunct US brokerage MF Global, two people familiar with the situation said on Tuesday, making it the exchanges largest shareholder, Reuters reported.The US investment bank would pay 25 million ($39.1m) pounds for the stake in the worlds largest metal market, the sources said, implying a total value of around 530 million pounds for the operator.An announcement could come as early as this week.The sale to J.P. 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 one billion pound takeover.J.P. Morgan, which already holds a 6.2 per cent in the LME, declined to comment. The LME also declined to comment, as did KPMG, the administrators for MF Globals UK unit.J.P. Morgan would separately also buy the B-shares held by MF Global for two million pounds, one of the sources said.Industry sources told Reuters last Wednesday that MF Globals ring dealing seat on the LME would be bought by US-based broker INTL FCStone.Selling the stake would 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 $1.2bn, about double initial estimates from regulators, the trustee liquidating the company said on Monday.Regulators are investigating what happened to the money and whether MF Global may have improperly mixed customer money with its owna major violation of industry rules. No charges have been filed.
Click here to read full news..