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SGX makes $103.5m bid for the Baltic Exchange

SGX makes $103.5m bid for the Baltic Exchange
The Singapore Exchange (SGX) is making a GBP77.6m ($103.49m) all cash bid for the Baltic Exchange following over two months of exclusive discussions.

SGX said on Thursday it had agreed with the Baltic Exchange to offer GBP160.41 in cash per basic Baltic share. The Baltic is owned by 380 shareholders, many from the shipping industry.

It is expected that shareholders would receive a final cash dividend of GBP18.80 per share, conditional on the acquisition proceeding. This would bring the total valuation of the Baltic GBP86.7m.

“The Baltic Exchange will now consult its major shareholders to secure their support for SGX’s offer,” the Baltic said. “Subject to receiving sufficient support, and to it receiving the endorsement of the Baltic Exchange Board, it is expected that a scheme of arrangement will then be circulated to shareholders and a general meeting will be announced, for shareholders to vote on an offer from SGX.”

The move forward with a formal bid by SGX follows a new agreement between the Baltic and its shipbroker panelists last week.

The move by SGX to buy London-headquartered Baltic, founded in 1744, is being seen as yet another sign that the gravity of shipping is shifting eastwards.

However, SGX has made a number of commitments in its bid including maintaining Baltic’s London headquarters at St Mary Axe, to preserve the Baltic’s current ethos as a membership organisation with member representation whose market activities are governed by the Baltic Code, and maintain membership subscriptions and data fee levels for members for five years.

SGX has rapidly built up a position in the dry freight derivative clearing market with over the last 18 months, and its market share topped 50% in March.