SGX, LSE tying up for London Metal Exchange bid: source

Fri Sep 30, 2011 10:33am EDT
 
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By Denny Thomas

HONG KONG (Reuters) - The Singapore Exchange Ltd (SGXL.SI: Quote) is tying up with London's main bourse to make a joint bid for the London Metal Exchange, a source told Reuters on Friday, as the world's largest metal market seeks a suitor in a deal that could be worth 1 billion pounds ($1.57 billion).

The consortium has appointed a bank to advise it on the bid, said the source, who had direct knowledge of the deal, with the auction expected to attract rival offers.

The joint bid underscores the ambitions of both exchanges to diversify into the fast-growing space of metals trading, as traditional businesses of equity and derivatives trading faces increasing competition.

Both the SGX and the LSE are coming off failed merger attempts amid a flurry of exchange auctions that were prompted by loss of market share across the industry to alternative trading venues.

"This is a joint bid, so I guess SGX would have learned some lessons from the ASX bid," said Roger Tan, managing director at SIAS Research in Singapore.

SGX, led by experienced dealmaker Magnus Bocker, has been trying to raise the profile of Asia's second-largest listed bourse and compete against its larger rival in Hong Kong.

Bocker was the man who stitched together seven Nordic bourses to create OMX, later sold to NASDAQ (NDAQ.O: Quote). (For a Newsmaker on Bocker.

But his attempts to buy ASX Ltd ASX.AX was rejected by the Australian government five months ago.   Continued...

 
<p>Clerks at work at the London Metal Exchange, London, July 22, 2011. REUTERS/Paul Hackett</p>