The Baltic Exchange chose to enter into exclusive negotiations with the Singapore Exchange because of its interest in keeping the organisation London-based, its chief executive has said.
Jeremy Penn, who is due to stand down from the Baltic Exchange this summer after more than a decade, told City A.M. the Singapore Exchange wants to use the capital as its base for European expansion.
He said: “It’s a very positive vote by way of an investment in the UK’s maritime business services.”
Penn acknowledged that other organisations had shown an interest in the Baltic Exchange – with the China Merchants Group, CME Group, Intercontinental Exchange and Platts all previously being linked with moves.
Asked why the Baltic Exchange had decided to enter into exclusive talks with Singapore, he said: “The overall package of their proposal, particularly in terms of their view of the future of the Baltic and the continuity that they were anticipating, was the most attractive. Of course price is a component part. But overall… a lot of what they want to do with the business fits very well with our own views.”
He added: “The fact that we will still be headquartered in London and very much a London-based organisation [is important]. But also, of course, offering further opportunities for expansion, particularly in Asia.”
Asked why having a London HQ is important, Penn said: “We still believe that the Baltic Exchange is a place as well as an entity and the building which we own in London is important. It represents a lot of what we mean by being a membership organisation.”
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Penn said: “It’s almost a question of if you looked at it the other way around, what would the alternative be? And if the alternative was to say, okay, the Baltic as a place disappears and this is now a business run from Singapore, that would not be an attractive outcome.
“So the attractive outcome is that it continues to be a membership organisation based in London with a physical presence here. And actually the Singapore Exchange has said that they want to use the London headquarters as their base for their own attempts to expand in Europe. It’s a very positive vote by way of an investment in the UK’s maritime business services.”