SIX joins European stock exchange big league after sealing BME deal

[MADRID] Swiss company SIX on Thursday became Europe's third largest stock exchange operator by revenues after completing a 2.57 billion euros (S$4.04 billion) takeover of Spanish rival BME, forming a base for European Union (EU) expansion.

The takeover deal - which values the company at 2.80 billion euros - marks the end of the independence of the Spanish bourse that was founded in 1831.

The acquisition of one of Europe's last standalone stock exchanges comes at a time when the industry is struggling with lower fees and declining revenues, though market volatility in March due to the Covid-19 outbreak temporarily increased trading income.

SIX's chief executive officer Jos Dijsselhof told a virtual news briefing on Thursday that for now the Swiss company was not planning to delist BME as the acceptance level for the bid had not surpassed a 95 per cent threshold. He also said the listing of SIX was not "an active plan at the moment".

SIX's all-cash takeover bid was accepted by owners of 77,899,990 BME shares, representing a 93.16 per cent of the Spanish company's capital, Spain's CNMV market regulator said.

When SIX submitted its offer in November, it said it was subject to a minimum acceptance condition of 50 per cent plus one share.

Mr Dijsselhof said SIX remained committed to maintaining BME headquarters and operations for at least 10 years and also said that the company was not planning to engage in massive layoffs in Switzerland or in Spain.

With major exchange players in Europe Deutsche Boerse and London Stock Exchange effectively too big to consolidate without raising competition concerns, smaller exchange operators have become more attractive targets.

Paris-based Euronext, which has already scooped up Dublin and Oslo exchanges, initially expressed an interest in buying BME, but did not submit a counter-bid.

Mr Dijsselhof said that BME would give SIX an opportunity to look at further expanding its business to more customers in the EU.

After adjusting for dividends, SIX's takeover offer was 32.98 euros per share in cash.

Shares in BME closed 0.061 per cent higher at 32.80 euros.

BME recently said its dividend payout policy, currently around 90 per cent of net profit, is likely to come down, although SIX has not yet made any decision.



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