London Metal Exchange Denies Report of CBOT Link-Up

Oct. 9 (Bloomberg) -- The London Metal Exchange, the biggest marketplace for trading aluminum and copper, denied a report in the U.K.'s Observer newspaper that it may seek an alliance with, or be sold to, the Chicago Board of Trade.

``There is no substance to this specific rumor,'' Chief Executive Officer Martin Abbott said today in an interview in London. Abbott will meet CBOT CEO Bernard Dan for breakfast this week, but the meeting won't differ from those he has with others this week, Abbott said.

The Observer reported yesterday, without saying where it obtained the information, that Dan would talk with Abbott about a link-up at a meeting this week. Dan would either like to buy the LME or set up an alliance, the newspaper said.

Abbott, 46, took the helm of the 129-year-old LME last week, succeeding Simon Heale, who stepped down to pursue other interests. There has been speculation that the exchange might seek to raise funds via an initial public offering or a takeover, as its share prices have soared 72 percent since June.

``There is no rush, no urge, to merge for the LME,'' Abbott said. ``It is not in my remit to take the LME to an IPO. I do not expect to take the LME to an IPO next year or the year after.''

Trade on the LME soared to record $4.5 trillion last year, driven by consumer demand and increased purchases of index trackers and hedge funds. The LME base metals index has jumped 55 percent this year, exceeding gains in stocks and bonds.

Abbott, who was publisher of U.K.'s Metal Bulletin, didn't rule out the possibility that the LME may extend the hours of its Select electronic trading platform to around the clock, from 1 a.m. to 7 p.m. London time currently. The exchange will have to consult authorities in the countries to be involved, the clearing house LCH.Clearnet and other related parties, he said.

The LME chief also said he hasn't considered a complete switch to electronic trading and an abandonment of the LME floor, the last in the U.K.

The LME has polled its members on whether to shorten trading hours on the floor by one hour. It will introduce reduced-size metals contracts for aluminum, copper and zinc, all to be traded electronically, on Nov. 20.