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November 23, 2011

JP Morgan buys MF Global UK shares: KPMG

Administrators KPMG UK said JP Morgan has agreed to buy all shares of bankrupt financial derivatives broker-dealer MF Global UK operations.

The Big Four firm, a court appointed special administrator, said the banking giant agreed to buy 625,000 ordinary ‘A’ and ‘B’ shares at the London Metal Exchange (LME) following a “competitive bidding process”.

MF Global UK joint special administrator Richard Heis said the sales process for various aspects of the MF Global UK business continues apace and “we are in negotiations with several parties to this end”.

“In the mean time, we have prepared a timeline for the return of client assets and client monies,” Heis added.

The price of the sale has not been disclosed, however according to some news reports JP Morgan is to pay £25m ($39m).

MF Global filled for chapter 11 bankruptcy in the US in early November as a result of buying a large amount of European sovereign debt and a sudden loss in profits.

The subsequent collapse of the companies UK operations led to the loss of more than 700 jobs in its London office.

KPMG UK is the first firm to conduct an administration under the Special Administration Regime, which was set up in the wake of the Lehman Bros collapse, and is different to other corporate administrations because it requires administrators to focus on a swift return of client assets and the timely engagement with authorities.

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