SGX Progresses on its Plans to Acquire Baltic Exchange, Shareholders Approve

Singapore Exchange ’s (SGX)’s has agreed to terms to acquire the Baltic Exchange Limited, and will now proceed with support from shareholders of the Baltic Exchange – following an earlier announcement in May, SGX will make a play for Baltic Exchange shares for a total of $210.6 (£160.41) in cash per Baltic Share, representing a total sum of $101.9 million (£77.6 million).

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Back in May, SGX had agreed in principle to acquire London-headquartered Baltic Exchange Limited (Baltic Exchange), a transaction aimed at strengthening two key maritime hubs between the U.K. and Singapore, supported by the synergy of the two financial market operators. Previous talks had centered on an agreement of a cash offer to acquire 100% of Baltic Exchange’s share capital.

The new agreement will also stipulate that Baltic shareholders will be granted at least $24.7 (£18.80) in cash as a final dividend per Baltic Share, which will be subject to approval by the Baltic Shareholders. Moreover, this payout is conditional to SGX’s proposed cash offer for 100% of the Baltic Shares becoming effective, which it is on par for at this juncture.

SGX has warned that there is no assurance policy that the exclusivity agreement signed on 25 May 2016 would definitely lead to any concrete agreement or completion of the Potential Transaction. However, the agreement has passed a major hurdle, i.e. Baltic shareholders, which bodes well for green lighting the deal.