Baltic Exchange Takeover Approved by UK Regulator

By Jonathan Saul

LONDON, Oct 19 (Reuters) – Britain’s Financial Conduct Authority (FCA) has approved Singapore Exchange’s 87 million pound ($107 million) takeover of London’s Baltic Exchange after shareholders gave the green light for the deal last month, the Baltic said on Wednesday.

The acquisition is one of the latest developments in a string of mergers, bidding wars and failed deals among global exchanges. SGX’s offer comes as the global shipping industry is struggling with its deepest downturn.

The privately owned Baltic Exchange – one of London’s oldest commercial institutions – said the FCA gave its regulatory approval on Oct. 13, clearing the way for the final stages of the deal.

“In light of the decision by the FCA, the court hearing to sanction the scheme, initially expected to be in late November 2016, has now been scheduled to take place on 7 November,” the Baltic said in a statement.

SGX added separately on Wednesday that the transaction was expected to be completed by the end of November this year.

Founded in 1744 as a forum for chartering vessels, the Baltic Exchange now produces benchmark indexes for global shipping rates and owns a trading platform for the freight derivatives market.

SGX, started in 1999, says it sees the potential to develop new freight derivatives centred on active Asian shipping routes and expand the use of freight derivatives with its acquisition of the Baltic.

Baltic shareholders unanimously approved the takeover on Sept. 26. After months of talks, SGX offered shareholders 160.41 pounds per share.

Shareholders will separately receive 19.30 pounds per share from the Baltic as a final dividend, giving the business a total valuation of about 87 million pounds.

SGX on Wednesday reported a 16 percent drop in first-quarter net profit as its revenue from derivatives, equities and fixed income bore the brunt of muted market conditions.

($1 = 0.8128 pounds) (editing by David Clarke and David Evans)

(c) Copyright Thomson Reuters 2016.

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