JPMorgan Chase & Co. (JPM) is nearing a deal to acquire MF Global (MF) Holding Inc.’s stake in the London Metal Exchange for about 25 million pounds ($39 million), according to a person familiar with the process.
MF Global filed for bankruptcy protection last month after making bets that went bad on European sovereign debt. Its British subsidiary, MF Global U.K. Ltd., one of 12 category 1 members of the LME that normally hold the right to trade on the floor, was stopped from trading on the metals exchange on Oct. 31. The company’s special administrator in Britain, KPMG, has been trying to sell the unit’s stake.
The subsidiary owns 600,000 ordinary shares out of 12.9 million, a 4.7 percent stake, and 25,000 nonvoting B shares, according to a U.K. Companies House filing on Oct. 24.
JPMorgan has raised its holdings in the LME over the past year. It owned 800,000 shares as of Oct. 24, compared with 550,000 shares a year earlier, according to filings with Companies House.
The LME, for its part, has been the object of takeover interest. The exchange, which handles 80 percent of global trade in metals futures, said in September it had received several “expressions of interest.” A bid may be recommended to shareholders as early as March, Martin Abbott, chief executive officer of the exchange, said at the time.
JPMorgan wants to control the spice. The spice must flow!