SGX enters exclusive take-over talks with Baltic

MAY 25, 2016 — The Baltic Exchange Limited says that it has entered into exclusive discussions with Singapore Exchange Limited (SGX) regarding a cash offer for 100% of the share capital of the Baltic Exchange.

"The Baltic's Board considers that SGX has made an attractive proposal that has the potential to enhance significantly the position of the Baltic, serving the needs of Baltic members, shareholders and other stakeholders," says a statement. "The next phase will be to continue detailed discussions with SGX and consult with Baltic stakeholders before making a final recommendation."

Key aspects of the SGX proposal include commitments to:

  • Retain the Baltic's headquarters in St Mary Axe, London and maintain its premier position within the global shipping community
  • Broaden the Baltic's existing presence in Asia utilizing SGX's strong regional distribution network
  • Preserve the Baltic's current ethos as a membership organization with member representation whose market activities are governed by the Baltic Code
  • Maintain membership subscriptions and data fee levels for members for five years
  • Retain the multiple clearing house model
  • Sustain the existing market benchmark production and governance model
  • Hold SGX clearing fees for FFA contracts at current levels for at least five years
  • Continue to provide a broad range of membership services including dispute resolution, social and charitable activities

In addition SGX will seek to enhance the relationship between the Baltic and its contributing panelists and will provide commitment regarding the future business of FFA brokers.
The Baltic Exchange and SGX will together meet with shareholders and the wider stakeholder community of members and key industry participants over the coming weeks to explain the terms of the proposal and build a consensus of support, before presenting a definitive agreement which can form the basis of a Board recommendation to shareholders.

Baltic Chairman Guy Campbell explained: "SGX has indicated that in the event its bid is successful, it would maintain the current model for the Baltic business and our presence and building in London, as the platform for the Baltic's future growth. The proposed transaction would further strengthen the links between London and Singapore, two of the world's leading maritime business hubs, to the benefit of all.

"The Board considers this proposal is an exciting development for the Baltic and all the stakeholders in the markets it serves, which secures the future of the Baltic's role in the global maritime marketplace in the 21st century.

"We look forward to communicating directly with many of our stakeholders in the next few weeks to explain the proposal to them."

SGX CEO Loh Boon Chye said, "We are delighted to have been granted exclusivity to discuss this potential transaction and look forward to working with Baltic Exchange's shareholders, members and relevant stakeholders to further discuss our proposals. This is the tenth year of our relationship with the Baltic Exchange and we recognize the integral role the Exchange plays within the global shipping community, which we hope to develop for the benefit of the industry as a whole."

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