London Metal Exchange (LME) shareholders decide on Wednesday whether to accept a £1.4bn offer by the Hong Kong Stock Exchange (HKEx) for the 135-year-old institution.
A survey published on Monday with responses from 38 of the banks, funds and industrial users entitled to vote – more than half of the total – showed that most of those who had reached a decision would vote yes to a sale of the exchange at an extraordinary general meeting.
That would get the vote past the first hurdle of a positive outcome from 75 per cent of total shares in favour of the offer from HKEx that the LME board endorsed last month over a bid from InterContinental Exchange.
However, the LME's system of voting, designed to give a big voice to smaller shareholders, means that in a second part of the process, when votes of those attending the meeting are counted, the overall outcome could still go either way if industrial users turn out in force.
"We will vote against, and our proxy papers have been filed," said an executive at an industrial company. "The people I have talked to feel very uneasy about the consequences of a sale."
Industrial shareholders – metals producers and traders – have voiced objections to the takeover since the start of the process, fearing any sale might alter its unique, complex structure of futures trading and low fees.
However, HKEx chief executive Charles Li has promised that until at least 1 January 2015, HKEx will preserve the LME brand, the open-outcry trading and the structure.
City A.M. Reporter