Baltic Exchange shareholders approve takeover by SGX

SINGAPORE – Shareholders of the Baltic Exchange have voted in favour of an £87 million (S$153 million) takeover by Singapore Exchange (SGX) of the storied London institution in a deal that will give the Singaporean bourse operator access to the multibillion-dollar global freight derivatives market.

The transaction, unanimously recommended by the Baltic’s board last month, was approved by shareholders at a general meeting yesterday in London. The deal still needs regulatory approval, which shipping industry sources say is likely to be given.

SGX chief executive Loh Boon Chye said in a statement yesterday: “We now look forward to completing the transaction and realising the growth opportunities as we bring together two important maritime centres.”

In a separate statement, Baltic Exchange yesterday named Mr Mark Jackson, a former chairman and director, to replace chief executive officer Jeremy Penn. Mr Jackson, chief commercial officer of Greece’s AM Nomikos Group, is expected to take up his appointment early in 2017. Mr Penn had announced his intention to stand down last year.

As the global shipping industry struggles with poor market conditions, SGX offered — after months of talks — Baltic shareholders £160.41 per share plus £19.30 per share as a final dividend, giving the privately owned business a total valuation of about £87 million. SGX is looking to expand its global presence in shipping and has been developing Asian pricing benchmarks for commodities such as iron ore, liquefied natural gas and coking coal.

The Baltic Exchange is owned by about 380 shareholders, many from the shipping industry. Founded in 1744, it is no longer a forum for chartering vessels but owns benchmark indexes for global shipping rates and provides a trading platform for the multibillion dollar freight derivatives market.

The SGX, started in 1999, made its offer as freight costs stay pressured after a slump in global commodity markets coincided with an increase in the number of vessels.

The purchase by SGX would boost its plans to diversify revenue streams at a time when it has been hit by sluggish equity listings and securities volumes. It would also benefit from a drop in the value of the pound. Sterling fell as much 13.3 per cent against the Singapore dollar after Britain’s vote on June 23 to leave the European Union, but has recovered almost 2 per cent from its low to S$1.7610 yesterday. AGENCIES