LME profits fall on higher costs, investments - FT
LONDON (Reuters) - Profits at the London Metal Exchange (LME) fell 19 percent last year, as higher costs and investments outweighed a sharp rise in trading volumes, the Financial Times reported on Wednesday.
The results come as three major exchanges compete to buy the LME, the world's largest metals marketplace. The exchange has been independently valued at 1 billion pounds.
The exchange disclosed it would pay Moelis & Co, its financial adviser, a 3.5 million pound fee plus 0.5-0.7 per cent of the valuation of the exchange if it is sold, the FT reported.
It will pay a further 500,000 pounds to "other advisers", likely to include RLM Finsbury, the public relations firm. The LME has also retained Freshfields has a legal adviser.
According to figures disclosed in the LME's annual report and seen by the FT, revenues at the LME rose by a fifth last year.
That was on the back of a 22 per cent increase in trading volumes in its contracts, which serve as global benchmarks for metals such as copper, aluminium and zinc, but net profit fell from 9.5 million pounds to 7.7 million pounds on the back of higher costs.
CME Group, Hong Kong Exchanges and Clearing Limited (HKEx)(0388.HK) and Intercontinental Exchange (ICE.N) are competing to buy the 135-year-old metals bourse.
NYSE Euronext (NYX.N) is now out of the bidding, a spokesman said on Tuesday, after its reported 800 million pound ($1.28 billion) bid was deemed too low.
(Reporting by Susan Thomas, editing by William Hardy)
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