On July 22, 2016, Singapore Exchange Limited (SGX) and The Baltic Exchange Limited (Baltic Exchange) announced that they had agreed on the terms for a recommended offer by SGX for the entire issued share capital of the Baltic Exchange (Proposed Acquisition). Under the terms of the Proposed Acquisition, Baltic Exchange shareholders will be entitled to receive:
- £160.41 in cash (the Cash Price) for each Baltic Exchange Share
- £19.30 in cash (the Special Dividend) per Baltic Exchange Share as a final dividend
In aggregate, the Cash Price and the Special Dividend value Baltic Exchange’s entire issued ordinary share capital at approximately £87.0 million (approximately S$153 million).
SGX has received irrevocable undertakings to vote in favour of the Proposed Acquisition from the Baltic Exchange Directors and certain Baltic Exchange Shareholders representing approximately 74 per cent of the existing issued share capital of Baltic Exchange.
Completion of the Proposed Acquisition is expected to occur towards the end of November 2016, subject to achieving the necessary shareholder, regulatory and Court approvals before that time.
Post-Acquisition Commitments
Under the terms of the Proposed Acquisition, SGX and SGX Baltic Investments Pte. Ltd (SBI) have committed to:
- Maintain Baltic’s headquarters in St Mary Axe;
- Maintain 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; and
- Procure that Baltic and BEISL will use their reasonable endeavours 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 (e.g. for clearing houses).
Data Sources: Baltic Exchange | Effective Date: November 30, 2016
