JP Morgan to up LME stake

JP MORGAN Chase is set to become a major player in the looming takeover battle for the London Metal Exchange after it snapped up the stake owned by failed brokerage MF Global.

Last night the US investment bank was on the brink of paying £25m for MF Global’s 4.7 per cent stake from UK administrator KPMG, giving the LME a notional value of £530m.

The deal, which could be announced today, pushes it ahead of Goldman Sachs and makes it the largest shareholder in the 134-year-old exchange.

City A.M. understands JP Morgan is mulling whether to further increase its stake in the LME, which in September said it was open to a potential £1bn takeover.

JP Morgan, the LME and KPMG all declined to comment.

Chicago Mercantile Exchange yesterday raised the amount it is willing to guarantee the bankruptcy trustee of MF Global from $250m to $550m.

And the trustee also said it expects to soon recover $1.3bn of MF Global customer assets from Harris Bank.

That sum would be pooled with $3.7bn of other assets under its control, for eventual distribution to customers. The recovery of the $1.3bn would not affect the current estimate of the size of MF’s shortfall.