Baltic Exchange in exclusive discussions with Singapore Exchange after takeover offer

William Turvill
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The Singapore Exchange was among a string of suitors interested in the Baltic Exchange (Source: Getty)

The Baltic Exchange has entered into exclusive discussions with the Singapore Exchange following a takeover offer.

The financial maritime hub, which is located in the heart of the City of London, was also understood to have attracted interest from the CME Group, Intercontinental Exchange and Platts.

The London exchange is home to the Baltic Dry Index, which measures the cost of shipping huge quantities of coal, ore, grain and other dry commodities across the world.

The Singapore Exchange announced that it had made a takeover bid for the Baltic Exchange on 26 February. It said today that its period of exclusivity with the London-based firm would start today and last until 30 June.

The Baltic Exchange has been valued at between $80m and $100m, but it declined to comment on these figures.

Read more: String of foreign buyers circling the Baltic Exchange

Baltic Exchange is being advised by Nomura and Norton Rose Fulbright.

The Baltic Exchange said the Singapore Exchange had made an “attractive proposal that has the potential to enhance significantly the position of the Baltic”.

Under the proposal, the Baltic’s headquarters would remain at St Mary Axe.

The company said it would broaden its existing presence in Asia, using the Singapore Exchange’s “strong regional distribution network”.

The exchange houses plan to meet with shareholders and stakeholders in the coming weeks to explain the terms of the proposal before presenting a definitive agreement.

The Baltic Exchange’s chief executive Jeremy Penn is due to leave the exchange this summer, with the company currently seeking a replacement.

Read more: China Merchants Group eyes Baltic Exchange

Chairman Guy Campbell said: “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.”

Singapore Exchange chief executive 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 recognise 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.”