LONDON, May 11 (Reuters) - Hong Kong Exchanges and Clearing Ltd and NYSE Euronext are the leading contenders among the four bidders to buy the London Metal Exchange (LME), the world’s largest metals marketplace, sources familiar with the matter said on Friday.
Hong Kong Exchanges and Clearing, in particular, has put in a big bid, according to three sources, who declined to be named.
“The Hong Kong exchange are meant to have put in a large bid that will probably blow the others out of the water,” said one source who has been close to the process since it started in September. He declined to give a figure.
CME Group and InterContinental Exchange are also vying for the 135-year-old LME, which analysts and industry sources have valued at around 1 billion pounds ($1.62 billion).
The LME declined to comment.
The exchange held an extraordinary meeting with its board members on Thursday to look at details and discuss proposals from a shortlist of bidders, industry sources and sources familiar with the matter said. Meetings were continuing on Friday, the sources said.
The next scheduled board meeting is to take place on May 31 when the members will decide whether or not to recommend any bids to shareholders. A recommendation of one or more bidders could result in another round of due diligence.
LME Chief Executive Martin Abbott has said from the start that any possible sale would not be judged on price alone, but would also have to take into account the needs of the shareholders who own the exchange and use the market.
This could include a moratorium on changes to the exchange structure, including the operation of its open outcry ring.
“It’s a nice market to be involved in, especially when you have a say in the rule making, so any offer would have to outweigh not only the financial benefits but the convenience as well,” said the first source, who is close to the process.
Thursday’s meeting with board members came a day after French bank Natixis said it planned to close its commodities brokerage division, one of the oldest ring-dealing members of the LME, another casualty of the European debt crisis.
A second metals industry source suggested the Natixis plans would have added to the urgency for the board to meet, with the worsening euro zone crisis potentially denting the LME’s value as commodity prices struggle.