Singapore Bourse to Buy Baltic Exchange for 77.6 Million Pounds

  • SGX offers to pay 160.41 pounds in cash for each Baltic share
  • Holders may also get 18.8 pounds a share in final dividend

Singapore Exchange Ltd. has agreed to buy Baltic Exchange Ltd., the London-based provider of information on global shipping costs, for 77.6 million pounds ($102 million).

SGX will seek the support of Baltic Exchange shareholders with an offer to pay 160.41 pounds in cash for each of their shares, the Southeast Asian bourse said in a statement Thursday. In addition, the shareholders may receive at least 18.8 pounds a share from Baltic as a final dividend, SGX said.

The publisher of shipping rates that shape the cost of hauling commodities from iron ore to oil is currently owned mostly by shipbrokers. Baltic, which will keep its head office in London under the proposed accord, has built a platform to allow traders of freight derivatives to buy and sell the contracts. SGX will continue to allow other organizations to clear such deals and freeze its own costs for doing so for five years, it said in a statement in May.

SGX plans to “proceed with the solicitation of support from shareholders of the Baltic Exchange,” the company said. The final dividend is subject to approval by the Baltic shareholders and conditional upon acceptance of SGX’s offer for all of Baltic shares, it said.

Shares of Southeast Asia’s biggest bourse increased 1.2 percent to close at S$7.55 before the announcement. The transaction will help SGX and Baltic benefit from new growth opportunities, including potential new shipping benchmarks and clearing solutions, according to the May statement.

While Baltic is well-known among commodity and oil traders for its role in publishing freight costs, it is tiny compared with other exchanges. It had revenue of 6 million pounds in the year to March 31, 2015, according to its website. Singapore Exchange’s sales were about S$779 million last year ($580 million), data compiled by Bloomberg show.

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