London Metal Exchange makes informal bid for Baltic Exchange

London Metal Exchange makes informal bid for Baltic Exchange

The London Metal Exchange (LME) has informally approached the Baltic Exchange with a view to acquiring the privately owned business, reports say.

Sources told Reuters a potential offer could be based on three times the Baltic Exchange’s net asset value and was likely to be made in cash.

This is the reportedly the third time the LME has approached the Baltic with an expression of interest, as it aims to extend its scope beyond trading metals.

The Baltic’s shipbroker members and shareholders rebuffed the LME’s previous advances in an effort to retain control over its operation.

The Baltic’s equity consists of 483,860 allotted and fully paid ordinary shares for the fiscal year ended March 2015. Shareholders’ funds for the year were £28.04m ($43m).

Jeremy Penn, chief executive of the Baltic Exchange, declined to comment when approached by the newswire.

In 2013, the LME and other parties expressed interest in buying Baltex, the Baltic’s FFA platform.

The freight derivatives software had suffered financial losses since its launch in 2011, but this year posted a break-even result, which will be an added bonus for LME.

Penn told Reuters in June the Baltic was studying a potential foray into commodities and was open to proposals on tie-ups with other exchanges.

The LME was itself acquired from its members in 2012 by Hong Kong Exchanges and Clearing (HKEx) for $2.2bn.

Holly Birkett

Holly is Splash's Online Editor and correspondent for the UK and Mediterranean. She has been a maritime journalist since 2010, and has written for and edited several trade publications. She is currently studying for membership of the Institute of Chartered Shipbrokers. In 2013, Holly won the Seahorse Club's Social Media Journalist of the Year award. She is currently based in London.

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