SGX makes $139m offer for Baltic Exchange

The privately owned Baltic Exchange is a British institution that dates back to 1744. It is known for compiling extensive market data, such as daily indexes tracking the dry bulk and tanker shipping sectors.
The privately owned Baltic Exchange is a British institution that dates back to 1744. It is known for compiling extensive market data, such as daily indexes tracking the dry bulk and tanker shipping sectors.PHOTO: REUTERS

Baltic's shareholders will have to okay the cash offer of £160.41 a share

The Singapore Exchange (SGX) has made a formal offer to buy London's Baltic Exchange for £77.6 million (S$139 million).

Baltic Exchange shareholders will have to approve the cash offer of £160.41 a share, the SGX said in a statement yesterday.

They will also receive at least £18.80 in cash as a final dividend per share, subject to approval by Baltic shareholders and conditional upon the SGX's offer becoming effective.

The privately owned Baltic Exchange - a British institution that dates back to 1744 - is known for compiling extensive market data such as daily indexes tracking the dry bulk and tanker shipping sectors.

The data is used by its member firms as benchmarks for settling shipping contracts and derivatives.

The SGX has said in the past that acquiring the Baltic Exchange would be a boost for the bourse, given Singapore's strength as a shipping centre.

The Baltic Exchange said it will consult major shareholders to seek their support for the offer.

Subject to receiving sufficient shareholder support and endorsement from the Baltic board, a scheme of arrangement will be circulated to shareholders and a general meeting will be announced for shareholders to vote on the offer from the SGX, the Baltic said in a statement.

A spokesman said the meeting was unlikely to take place before next month, according to a Reuters report.

The SGX and the Baltic Exchange said in May this year that SGX was in exclusive talks to buy the Baltic, with the period of exclusivity lasting until June 30. The talks were later extended until Aug 31.

The SGX previously said it will keep the Baltic Exchange's headquarters in St Mary Axe in London if the acquisition goes through, and also retain the end-user data fees charged by the Baltic Exchange at the same level for at least five years.

Its statement yesterday reiterated that "there is no assurance that the exclusivity agreement... will lead to any definitive agreement or completion of the potential transaction".

The deal would be the SGX's first high-profile acquisition in recent years.

The bourse has not found much success in expanding via asset acquisition. In 2011, its US$8.8 billion offer to buy out the Australian Securities Exchange for a merger was rejected by regulators.

A version of this article appeared in the print edition of The Straits Times on August 05, 2016, with the headline 'SGX makes $139m offer for Baltic Exchange'. Print Edition | Subscribe