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HKEx gets FSA approval of LME acquisition

Keywords: Tags  LME, Hong Kong Exchanges & Clearing, HKEx, Financial Services Authority, FSA approval, Claire Hack

LONDON — Hong Kong Exchanges & Clearing Ltd.’s (HKEx’s) 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 LME’s 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 LME’s 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 hasn’t 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 proceed.

The LME’s board on June 15 approved HKEx’s £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 (, June 15). That was followed on July 25 by ordinary shareholders’ approval of all the required resolutions (, July 25).

A version of this article was first published by AMM sister publication Metal Bulletin.

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