Baltic Exchange shareholders approve takeover by Singapore Exchange

LONDON (Reuters) - Baltic Exchange shareholders approved on Monday an 87 million pound ($112 million) takeover by Singapore Exchange SGXL.SI for one of London's oldest institutions, in a deal giving SGX access to the multi-billion-dollar freight derivatives market.

An office worker walks past a logo of the Singapore Stock Exchange (SGX) outside its premises in the financial district of Singapore April 23, 2014. REUTERS/Edgar Su/File Photo

As the global shipping industry struggles with poor market conditions, SGX offered - after months of talks - Baltic shareholders 160.41 pounds per share.

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

At its general meeting, 95 percent of those voting, or 228 shareholders, approved the deal. Many of the Baltic’s shareholders are in the shipping industry and include ship brokers, companies and individuals.

“This is about people actually taking a step back and saying is this a fair and appropriate way of moving the Baltic forward?” Outgoing Baltic chief executive Jeremy Penn told Reuters.

“Had the shareholders and members felt this was a bad deal, a bad thing, they would still have turned it down,” he said.

The takeover, unanimously recommended by the Baltic’s board last month, is one of the latest developments in a long string of mergers, bidding wars and failed deals among global exchanges.

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.

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

The deal will need regulatory approval, which shipping industry sources say is likely to be given.

The Baltic also named Mark Jackson its new CEO. Jackson, currently chief commercial officer of AM Nomikos Group and a former chairman and director of the Baltic Exchange, is expected to take up his appointment early in 2017.

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.

The Singapore Exchange, started in 1999, made its offer despite freight costs remaining under pressure, after a slump in commodity markets coincided with an increase in the number of vessels.

The Baltic Exchange has been located in the heart of the City of London since its founding in a coffee house. Its later flagship building was extensively damaged in an Irish Republican Army bomb attack in 1992. It moved to different premises and the Gherkin tower now stands on the site.

The London Metal Exchange 0388.HK, CME Group CME.O, ICE ICE.N, state-run conglomerate China Merchants Group [CNMGP.UL] and Platts were among other potential bidders, sources told Reuters previously.

Editing by Veronica Brown and Susan Thomas