Baltic Exchange takes another step toward merger with SGX

The Baltic Exchange, which publishes indexes for the dry bulk shipping and tanker industries, sent an agreement to its 48 shipbroking panelists asking them to sign the agreement, which would facilitate the finalization of an offer by the SGX.

   The Baltic Exchange, which is in exclusive talks to be acquired by the Singapore Exchange (SGX), has taken one more step towards the acquisition.
   On Monday, the Baltic Exchange sent an agreement to the 48 shipbrokers who are panelists for its indexes, such as the Baltic Dry Index, and asked for their signatures, which would facilitate the finalization of an offer by the SGX.
   These panelists give assessments, for example, on the cost of moving various types of dry and wet cargo on different trade routes that are then used to develop freight indexes.
   Other brokers give estimates of the value of various sorts of ships at five years of age, or vessel scrapping values in Bangladesh, China, India and Pakistan.
    The Baltic Exchange said the agreement “documents and reinforces existing processes established by the Baltic Exchange and its 48 shipbroking panelists.”
   “The proposed agreement follows extensive discussions with panelists and stakeholders and will now facilitate the finalization of an offer for the Baltic by SGX. The Baltic Board expects this agreement to be welcomed by the panelists as it offers both parties, end-users and the wider Baltic membership assurance with regard to the future production and governance of the Baltic indices,” the Baltic Exchange said.
   If the agreement is approved, the SGX will still have to present a formal offer to acquire the Baltic Exchange, and the 380 members of the Baltic Exchange will have to vote on whether to accept it.
   The SGX entered into exclusive discussions to acquire the Baltic Exchange May 25, and on June 28, a decision was made to extend the exclusive discussions until Aug. 31.