Stock Market Watch

JP Morgan Raises Stake in London Metal Exchange (JPM)

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JPMorgan ChaseJP Morgan Chase & Co. (NYSE: JPM) has significantly raised its influence in the battle to takeover the London Metal Exchange by increasing its stake. With the latest increase in stake, JP Morgan is now the biggest shareholder of the London Metal Exchange.

As the biggest shareholder, JP Morgan can exercise more influence and provide stronger input into any changes proposed by the bidders. The New York City-based bank also retains the option to the block a takeover of the exchange by teaming up with others, according to analysts.


JP Morgan raised its stake by winning a bidding process to acquire 4.7% stake in the London Metal Exchange, which is the world’s dominant market for trading industrial metals. The 4.7% that JP Morgan acquired was held by bankrupt broker MF Global Holdings.

JP Morgan now has a 10.9% stake in the exchange, taking it past Goldman Sachs (NYSE: GS), which has a 9.5% stake in the exchange. Metdist is the third biggest shareholder, with a 9.4% stake, followed by Swiss bank UBS AG (NYSE: UBS), which has a 4.3% stake.

London Metal Exchange is seeing interest from a number of parties for a possible takeover. According to the exchange, at least 10 parties have shown interest in acquiring the exchange. The exchange is expected to open its data room next month. A change in ownership of the exchange requires approval from members holding 75% of the ordinary shares.

Robin Bhar, analyst at Credit Agricole in London, told Reuters that it’s a win-win situation for JP Morgan. Bhar said that in a way it is a hedge against all those uncertain events. He added that JP Morgan may be taking a view that it could be a quick and profitable investment for it.

 

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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