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UPDATE 1-HKEx taps $800 million equity funding, gets FSA nod for LME
November 29, 2012 / 10:31 AM / 5 years ago

UPDATE 1-HKEx taps $800 million equity funding, gets FSA nod for LME

* HKEx offers new shares at discount of up to 7 pct to Thursday’s close

* Two more hurdles remain for HKEx proposed $2.2 bln LME purchase

HONG KONG, Nov 29 (Reuters) - Hong Kong Exchanges and Clearing Ltd is raising about $800 million to fund its takeover of the London Metal Exchange, tapping equity markets minutes after receiving approval on Thursday from Britain’s Financial Services Authority for the acquisition.

The proposed $2.2 billion takeover of the LME marks the biggest foray for the HKEx, the world’s No.2 exchange operator by market value, as it looks to expand beyond its traditional business in stock trading.

Approval from the British regulator leaves HKEx with only two more hurdles to closing the transaction. HKEx said in a securities filing a court hearing to approve the deal and confirm capital reduction were expected on Dec. 5, after which it would become unconditional and take effect the next day.

The acquisition has been hailed by HKEx Chief Executive Charles Li as “transformational,” giving the Hong Kong bourse operator access to the 135-year-old LME, where trading of copper, aluminium, nickel and other metals is still conducted with arcane hand gestures and screaming traders.

To fund part of the acquisition, HKEx is offering new shares in a range of HK$116.1-HK$119 each, IFR, a Thomson Reuters publication, reported, citing a term sheet of the deal. The price is equivalent to a discount of up to 7 percent to Thursday’s close of HK$124.80.

Deutsche Bank AG, HSBC, UBS AG were hired to manage the share sale, IFR added.

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