LONDON Hong Kong
Exchanges & Clearing Ltd.s (HKExs) acquisition
of the London Metal Exchange has been formally approved by the
U.K. Financial Services Authority (FSA).
This approval fulfills the first
part of the conditions set out in the scheme document released
July 9, about two weeks before the LMEs shareholders
approved the deal.
However, there are still
conditions to be met according to the document, the board of
directors of LME Holdings Ltd., parent company of the London
exchange, said Thursday. This includes the sanctioning of the
scheme by the U.K.s High Court, for which a hearing is
slated for Dec. 5. This hearing is also expected to confirm the
related reduction of the LMEs ordinary share capital via
the cancellation of scheme shares.
"As the completion of the
transaction remains subject to the satisfaction of the
remaining conditions to the transaction as set out in the
scheme document ... there can be no certainty that such
conditions will be satisfied," the exchange said.
If these conditions are
satisfied, the transaction is expected to become effective as
quickly as the day after the hearing at the High Court.
If the scheme hasnt been
sanctioned by the High Court by the long-stop date on March 15
next year, it will lapse and the framework agreement could be
terminated. This would mean the acquisition would not
The LMEs board on June 15
approved HKExs £1.39-billion ($2.16-billion) bid
for the exchange, on the terms of the recommended cash offer
for the entire issued and outstanding ordinary share capital of
LME Holdings (
amm.com, June 15). That was followed on July 25 by
ordinary shareholders approval of all the required
amm.com, July 25).
A version of this article was
first published by AMM sister publication Metal