Another great British name flogged off to foreign buyers
300-year-old Baltic Exchange in Far East takeover
OnE of Britain’s most historic shipping institutions looks all but certain to pass into foreign hands after agreeing to exclusive talks with a Far Eastern buyer.
the Baltic Exchange has been a centre for bulk cargo trading since the days of the British Empire, surviving two world wars and a bombing by the IRa.
But its independence could be about to end. the organisation is now in takeover talks with the Singapore Exchange – which is seeking a new outlet as its traditional markets stagnate.
the Baltic Exchange said it had received ‘ an attractive proposal’ but critics warned the move could mean a crucial loss of independence.
When a sale was first proposed around two months ago, it led to worries among traders that services they relied on could become increasingly costly.
In a letter to others in the industry, John Banaszkiewicz of freight broker FIS said the move could be ‘followed by a more restrictive and probably more expensive agreement’.
the exchange was launched in a London coffee house in 1744 and quickly became a vital part of British finance. the exchange moved to a purpose-built centre in 1903, later establishing close connections with the Royal Family.
By the 1990s it was the last exchange floor left in the city – but its granite and stained-glass confines were wrecked by an IRa bomb in 1992. three people were killed, including a 15-year-old girl, amid £800m of damage. the site now houses London’s iconic Gherkin and the exchange is further along the same street.
the institution compiles the Baltic Dry Index – a key global record of the costs of transporting commodities. It also provides a host of other information and acts as a mediator in disputes.
the Singaporeans are thought to be offering around £54.4m for the institution. they have pledged to keep its headquarters in St Mary axe and maintain a ‘broad range of membership services’ while expanding operations in asia. Subscription fees for members will remain at £50,000 a year for the next five years, and there will be no increase in charges for users of its information services.
For the deal to pass, it must be approved in a crunch vote of about 380 shareholders.
Bosses at the Baltic Exchange and representatives from Singapore will meet members in coming weeks to drum up support. chair- man Guy campbell said: ‘the proposed transaction would further strengthen the links between London and Singapore, two of the world’s leading maritime business hubs, to the benefit of all.’
turnover at the Singapore exchange is down 25pc in the past five years. the British exchange made a profit of £1.6m last year, compared with the Singapore business’s profits of £172.4m – leading to claims it is little more than a trophy purchase.