Baltic Exchange investors vote in favour of SGX offer

The Singapore Exchange's (SGX) £87 million (S$153.73 million) proposed acquisition of the Baltic Exchange is on track with the two companies signing an implementation agreement following a unanimous decision by the Baltic board to recommend shareholders to vote in favour of the deal.

Earlier this month, the SGX made a formal offer to buy 100 per cent of the British supplier of key maritime data, including the Baltic Dry Index, which is used to price freight and freight derivatives.

It is making a cash offer of £160.41 for each Baltic Exchange share and a special dividend of £19.30 per share. The SGX had earlier said that Baltic shareholders would receive at least £18.80 in cash as a final dividend.

SGX chief executive Loh Boon Chye said in a statement: "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."

The SGX plans to enhance the Baltic's suite of shipping benchmarks by working more closely with Asian shipping participants to consider their weightage in shipping indices.

It also hopes to grow the pool of forward freight agreement users, and give Baltic Exchange members capital markets access through bonds, equities and securitisation, boosting Singapore's status as a wealth management and maritime hub.

The SGX also said that it envisions the Baltic's management team taking on active roles in the SGX's commodities business.

It added that it will keep the Baltic Exchange's headquarters in St Mary Axe in London, and retain the membership and end-user data fees charged by the Baltic Exchange at the same level for at least five years.

The takeover will be implemented via a scheme of arrangement, and the SGX will use its available cash on hand to fund the acquisition. The deal is expected to be completed by the end of November, subject to regulatory approval.

A version of this article appeared in the print edition of The Straits Times on August 23, 2016, with the headline 'Baltic Exchange investors vote in favour of SGX offer'. Print Edition | Subscribe