Danish brokerage powerhouse Saxo Bank has confirmed that the company placed a bid for BinckBank. Shareholders of the Dutch company are set to vote on the €424 million offer on April 23.
Back in December Saxo Bank submitted a bid for the discount brokerage listed on Euronext. Shareholders of the company were presented with a premium of 42 percent, 43 percent, and 38 percent over the average volume weighted price over the last one, two and three calendar months prior to the announcement.
The deal is currently expected to be completed in the first half of Q3 2019 with the shareholder vote largely technical.
“Our conversations and initial preparations over the past months have reaffirmed the strong cultural fit between BinckBank and Saxo Bank based on a shared vision and purpose to democratise investment and empower everyone to take control of their financial destiny,” the CEO of Saxo Bank Kim Fournais said.
On the side of the Dutch discount broker, the chairman of the BinckBank executive board, Vincent Germyns, added that merging both companies will help realize important economies of scale.
“On a term of two to three years, this will of course have consequences for staff. As far as possible these consequences will be met through natural staff turnover. In case of redundancies, a good severance scheme will apply. The executive board, supervisory board and works council support this severance scheme unanimously,” Germyns elaborated.
Saxo Bank is going to finance the deal with its available cash resources and through an equity financing of €100 million.
Industry Consolidation
With increased competition between brokers in the EU in an environment of a rapidly changing regulatory landscape, the deal between Saxo Bank and BinckBank is only confirming which way the industry is heading.
A more capital-intensive nature of the business is highlighted in the announcement made by the companies this morning. With the regulatory moves, client behavior is also changing, and the firms in the sector are required to take pro-active and decisive strategic actions.
The technological capabilities of Saxo Bank’s scalable platform offering and its significant investment into its development over the past years is a very strong boost for BinckBank’s product, which in itself will add a new mix to the Danish company's portfolio.
At the same time, the limited geographical overlap between the firms is providing a new opportunity for the Danish company to expand its presence across the EU. In particular, the markets that Saxo Bank will be adding to its portfolio are in the Netherlands, Belgium, and France.
Management Team
After the deal is completed, Saxo Bank intends to appoint S. Kyhl, S. Blaafalk, and F. Reisbøl, to the supervisory board of BinckBank. At the same time, J.W.T. van der Steen and J.G. Princen will continue as independent directors, while Van der Steen will serve as chairman of the Supervisory Board
After the deal is complete, the BinckBank executive board will be composed of three members, consisting of the current members of the Executive Board, who are V.J.J. Germyns, E.J.M. Kooistra and S.J. Clausing.
