The Baltic Exchange and the Singapore Exchange (SGX) have finalised the terms of the implementation agreement, with which SGX’s proposed takeover of the Baltic will be executed.
As part of the terms of the proposed deal, both parties have committed to maintaining the Baltic’s headquarters in St Mary Axe, London. It had been speculated previously that the building would be sold off.
SGX has also promised to maintain the existing multiple clearing house model and to strengthen production of the Baltic’s existing market benchmark, among other terms.
Membership subscription fees, end-user Baltic data fees and SGX clearing fees for FFA contracts will all remain at current levels for at least five years, as part of the agreement.
SGX has made a recommended offer of £87m (S$153m) in cash, in which Baltic shareholders will be offered a price of £160.41 for each of their ordinary shares in the London-based freight exchange.
Baltic shareholders could also receive at least £19.30 per share in cash as a final dividend, on the condition that SGX’s proposed offer for 100% of the share capital becomes effective. This would boost the Baltic’s total valuation to a minimum of £86.7m ($115.5m).
The deal is now pending approval by the UK Financial Conduct Authority and from at least 75% of Baltic shareholders. The two sides have been holding exclusive talks since May 25.
“We are delighted to have received such significant Baltic Exchange shareholder support for this transaction. We look forward to working together with the Baltic Exchange to develop new products, benchmarks and services to the benefit of Baltic Members, SGX shareholders and the shipping community worldwide,” Loh Boon Chye, CEO of SGX, said in a release.
Guy Campbell, chairman of the Baltic Exchange, said the proposed acquisition would “accelerate the growth and development of the Baltic Exchange beyond what it could achieve on its own”.
“Already a trusted business partner, SGX has committed to retaining the Baltic’s ethos as a membership organisation, retaining our London headquarters and further consolidating the Baltic’s value, influence and reach within the global shipping community,” Campbell said.