LONDON May 11 Talks between the Baltic Exchange
and a number of suitors are continuing, but any potential buyer
of the business will have to provide assurances that its central
role in shipping will not be “undermined”, the Baltic’s chairman
said on Wednesday.
On Feb. 26 the privately held Baltic Exchange confirmed it
had received a number of “exploratory approaches” after the
Singapore Exchange Ltd (SGX) said it was seeking
to buy the business.
Both statements came a day after Reuters reported the Baltic
had held talks with SGX and other potential buyers including CME
Group, ICE and Platts. Sources had estimated the
Baltic’s valuation was $120 million.
Baltic Chairman Guy Campbell told the exchange’s annual
cocktail party event in London that negotiations were ongoing,
but said he was “not in a position to expand on that right now”.
“I can assure you that we will not proceed beyond the
negotiation stage and make recommendations without first
consulting with all of you – members, shareholders, panel
members, end-users,” Campbell said in a speech.
“Any potential acquirer will need to provide assurances that
our 270-year legacy, our leadership position – both in London
and around the world – will not be undermined.”
Many segments of shipping – including dry bulk commodities –
are struggling with the worst market conditions in decades,
which has claimed casualties.
An acquisition of the Baltic, which was founded in 1744,
would give the winning bidder ownership of the industry’s
benchmark indices – which could be further commercialised – and
greater access to the multi-billion-dollar freight derivatives
market, known as FFAs.
“They will need to deliver an offer that does not disrupt
the successful FFA market which relies on our independent,
rigorously compiled indices,” Campbell said in prepared remarks.
Clearing houses and exchanges are all looking for a way to
distinguish themselves at a time of growing regulatory scrutiny
and weak commodities markets. Buying the Baltic would allow any
of those entities to diversify their activities into freight.
In March, sources told Reuters state-run conglomerate China
Merchants Group became the latest contender to make
an informal bid to the Baltic. Last October, sources said the
London Metal Exchange (LME) had made an approach to buy the
The Baltic, owned by around 380 shareholders, many from the
shipping industry, produces daily benchmark rates and indices
that are used across the world to trade and settle freight
In 2011, the Baltic – via a wholly owned subsidiary –
launched the first central freight derivatives platform, called
(Editing by Veronica Brown and Adrian Croft)
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