Saxo Bank just confirmed that it is in M&A discussions with Dutch discount broker BinckBank. The Danish company issued an official announcement confirming its intentions to make an offer totaling to about €425 million.
Saxo Bank’s offer for BinckBank represents a 35 percent premium over the closing price of the publicly-listed Dutch discount brokerage. The discussions between the companies are ongoing, and at the time of publication, the deal has not been closed.
The takeover offer has been made with a cash consideration of €6.35 per share (cum dividend) combination of their businesses through a friendly and recommended public offer by Saxo Bank for the entire issued and outstanding share capital of BinckBank at an offer price of EUR 6.35 per share with the dividend.
Discussions between the firms are still ongoing as Saxo Bank and BinckBank confirmed that those are at an advanced stage.
The financials of Dutch discount broker BinckBank show that the company’s revenue has been declining in recent years. The company used to generate as much as €180 million in 2010, with the number dropping to as low as €147 million in 2016.
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For the first half of 2018, the Dutch company reported revenues of almost €76 million. The company’s net profit for the first six months of the year amounted to €22 million. The figure is sharply higher when compared to the full year result in 2017 which was a net profit of €8.5 million.
The Dutch Discount Broker’s History
BinckBank was founded back in 2000 by four former employees of a now-defunct brokerage called IMG Holland. Initially, the firm was focused on institutional-level trading, but months after opening, it established a retail branch for online customers.
The initial investor in the young startup was a big trading firm called AOT with a 52 percent stake. The largest shareholder eventually took over in 2004.
After purchasing from Dutch Rabobank its main rival in the discount retail brokerage space in the Netherlands.
There are a number of synergies which can be beneficial for both sides. BinckBank has been slow to develop new products and innovate in the rapidly changing retail space, Saxo Bank is getting access to a very lucrative marketplace.
The regulatory synergies between the firms are also a big factor here since the potential cost savings from merging the continuously growing compliance departments of both EU-domiciled banks could yield significant cost optimizations.