SINGAPORE - THE board of the Baltic Exchange has recommended that shareholders vote in favour of the offer by the Singapore Exchange (SGX) to buy over 100 per cent of the company.
SGX had earlier in August confirmed that it would buy over the Baltic Exchange, a key supplier of data including the Baltic Dry Index, which is used to price freight and freight derivatives.
This Monday evening, SGX said that the parties involved have signed an implementation agreement, a move which paves the way for the deal to be completed.
SGX gave further details on the rationale of the acquisition, saying that it offers many opportunities. These include:
- Shipping Benchmarks: The creation and adoption of new benchmarks, especially Asian
shipping routes. These include bringing a focus to new Asian routes, and working more closely with Asian shipping participants to consider their weightage in shipping indices.
- Greater adoption of forward freight agreements (FFA): The alignment of benchmark provider and clearing platform will underpin the sustained marketing effort required to grow the pool of FFA users.
- Capital markets services: There will be capital markets access for the Baltic Exchange's members and clientsthrough bonds, equities and securitisation, allowing them to take advantage of Singapore's strength as a wealth management and maritime hub.
The value of the deal which includes the cash price and the special dividend comes to approximately £87.0 million (approximately S$153.0 million).