Saxo Bank Offers €424M to Buy BinckBank
Danish brokerage service Saxo Bank and Dutch online broker BinckBank confirmed in a joint press release that the former had placed a bid for BinckBank with an offer price of 6.35 euro per share. In total, it means that Saxo Bank is ready to spend 424 million euro on acquiring the Dutch firm. As we mentioned earlier, Saxo first announced its intention in December 2018.
Details of The Deal
Shareholders of the Dutch company are about to vote on April 23, 2019, whether the €424 million offer is fair. BinckBank’s executive board and the supervisory board unanimously support the proposal and recommend shareholders to accept it, suggesting that the vote will be technical.
The Offer Price comes with a 35% premium over the close price of ordinary shares as of December 14 of last year, the day before the initial announcement of the Offer, and a premium of 42%, 43%, and 38% respectively over the average price of the first, second, and third month before the announcement. Besides, the companies reached some non-financial agreements that would benefit BinckBank shareholders for about three years. The non-financial covenants touch upon corporate governance, financing, organisation, offices and brands, employees, integration, redundancy arrangements, the social plan, retention and training, and career opportunities.
According to the press release, the offer starts on March 13, 2019, and ends on May 22 of this year, with the possibility to be extended. If the shareholders’ vote passes the offer, the deal will be completed by the end of the third quarter of 2019.
Saxo Bank CEO and founder Kim Fournais commented:
Combining BinckBank with Saxo Bank is a true win-win for all parties. BinckBank's shareholders get an attractive premium, clients will get better products, prices, platforms and services, employees will benefit from enhanced career opportunities and, importantly, we will gain the necessary scale to further step up investments in technology and in our people.
As the investment and trading industry matures and faces new regulation as well as rising expectations for digital client experience, scale, technology and multi-asset capabilities become increasingly key to long-term success.
BinckBank chairman Vincent Germyns said that his company had managed to build a strong position since the establishment in 2000. The online broker became a leader in the homeland and Belgium, achieving great success in Italy and France as well. The merger with Saxo Bank will help BinckBank strengthen its position in these markets and expand its presence in the European Union.
Merging both companies will help realise important economies of scale. On a term of two to three years, this will of course have consequences for staff. As far as possible these consequences will be met through natural staff turnover. In case of redundancies, a good severance scheme will apply. The executive board, supervisory board and works council support this severance scheme unanimously.
Saxo Bank Records Lower Forex Volumes
The Danish broker published its trading volume figures for February, demonstrating an increase in commodities trading. However, Forex activity declined compared to January, which suggests a fifth month of decline in a row.
February total monthly volume was $198.8 billion, down 12.5% from January’s $227.4 billion. The Forex volumes in monthly terms fell 10%, from $151.8 billion to $136.6 billion. Year on year, the indicator fell 68.5% given that Saxo Bank recorded Forex volumes of $433.2 billion in February 2018. The daily average volume for foreign exchange trading also dropped, hitting the lowest figure since January 2016.
Commodities trading volume saw a slight increase of 2.1% compared to January 2019. However, fixed-income trading fell 20.3% to $5.1 billion.
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