After close to three months of exclusive discussions, the acquisition of the Baltic Exchange by Singapore Exchange (SGX) is expected to occur towards the end of November 2016.
SGX has received irrevocable undertakings voting in favour of the acquisition from the Baltic Exchange directors and certain shareholders representing around 74% of the existing issued share capital of Baltic Exchange.
Ahead of the proposed November completion of the acquisition, the deal will go through a court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006.
The procedure involves, among other things, allowing the Baltic Exchange shares to be transferred to SGX Baltic Investments (SBI) and Baltic Exchange shareholders will receive cash of GBP160.41 ($210.92) for each share, as well as GBP19.30 per share as a final dividend.
In aggregate, the cash price and the special dividend value Baltic Exchange’s entire issued ordinary share capital at approximately GBP87m.
The parties have also agreed to post-acquisition commitments including strengthen existing market benchmark production, maintain membership subscription fees and other data and clearing fees for at least five years, maintain Baltic Exchange’s headquarters in St Mary Axe, and maintain existing multiple clearing house model.
“We look forward to working together with the Baltic Exchange to develop new products, benchmarks and services to the benefit of Baltic members, SGX shareholders and the shipping community worldwide,” said Loh Boon Chye, ceo of SGX.
Guy Campbell, chairman of Baltic Exchange, said: “The proposed acquisition will accelerate the growth and development of the Baltic Exchange beyond what it could achieve on its own.
“Following extensive consultations with stakeholders, over the past few months, the board believes that SGX’s offer is in the best interests of Baltic Exchange shareholders, members, panellists, employees and of the broader London maritime hub, from where it will continue to be based,” Campbell said.
Jefferies International Limited and Nomura International plc are acting as financial advisers to SGX the Baltic Exchange respectively.
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