SGX Acquisition of Baltic Exchange Moves Closer to Completion

SGX has issued an update to its acquisition of the Baltic Exchange, complete with the exchange's considerations.

Singapore Exchange Limited (SGX) has progressed with its acquisition of Baltic Exchange Limited, having now mutually agreed to terms for a recommended offer for the entire issued share capital, per a recent Baltic Exchange report.

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The update follows on the heels of an earlier announcement this August, which signaled the support of Baltic Exchange shareholders given the proposal of SGX’s offering. Earlier this month, SGX reported that it would secure Baltic Exchange shares for a total of $210.1 (£160.41) in cash per Baltic Share.

In addition, Baltic Exchange Shares will also garner $25.3 (£19.30) as a final dividend. As such, the cash price and the special dividend value of Baltic Exchange’s entire issued ordinary share capital comes in at roughly $114.0 (£87.0 million). The deal was also supported by 74% of shareholders’ support of the existing issued share capital of Baltic Exchange.

Considerations

Under the deal and terms of the acquisition, SGX and SGX Baltic Investments Pte. Ltd will be formally committing to a number of different considerations. These include the following:

  • Maintain Baltic’s headquarters in St Mary Axe
  • Maintain the existing multiple clearing house model
  • Strengthen the existing market benchmark production and governance model in line with the proposed amended Guide to Market Benchmarks
  • Maintain membership subscription fees, end user Baltic data fees and SGX clearing fees of FFA contracts at current levels for at least five years
  • Continue to provide a range of membership services including dispute resolution and social and charitable activities
  • Ensure that Baltic and BEISL will use their reasonable endeavors to revise the terms of data licensing and subscription, specifically to clarify that the usage of the Baltic indices and/or data for physical and financial settlement without the involvement of a Baltic Panellist is unacceptable unless explicitly permitted by licence
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