The Singapore Exchange has agreed the terms of its takeover of the City of London-based Baltic Exchange.
Under the terms of the deal, Singapore would pay £160.41 per share in cash and £19.30 per share as a special dividend. It gives the Baltic Exchange a total value of around £87m.
The terms of the deal also confirmed that the Baltic’s headquarters will remain in the City of London. The UK firm also said Singapore is committed to "the Baltic’s ethos as a membership organisation".
Speaking to City A.M. after the exchanges announced they were in exclusive discussions, Baltic chief executive Jeremy Penn said the company had favoured Singapore over other suitors in part because of its desire to keep the London HQ.
The companies entered into exclusive takeover talks in May after the Baltic Exchange was linked with a string of suitors.
The financial maritime hub 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 deal, which needs shareholder approval, is expected to complete in November.
Loh Boon Chye, chief executive of the Singapore Exchange, said:
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.
Guy Campbell, chairman of the Baltic Exchange, said:
The proposed acquisition will 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.
Following extensive consultations with stakeholders, over the past few months, the Board believes that SGX’s offer is in the best interests of Baltic Exchange Shareholders, members, panellists, employees and of the broader London maritime hub, from where it will continue to be based.