NEX Group PLC (LON:NXG) has agreed to a takeover bid from US exchange operator CME Group Inc (NASDAQ:CME) for around £3.9bn (US$5.49bn) in a deal which will create a trans-Atlantic trading powerhouse.
In a statement, the FTSE 250-listed electronic trading firm said its shareholders will receive 500p in cash for each NEX share and 0.0444 new CME shares, valuing each share in the UK firm at 1,000p.
READ: NEX shares surge as it receives takeover approach from CME
NEX shares closed trading on Wednesday at 972p having soared over 30% higher on March 16 when the bid approach from CME was first revealed. In lunchtime time trading in London on Thursday, NEX shares were only up 0.05% at 972.5p, while in pre-market New York trading CME shares were down 0.1% at US$158.84.
Shareholders will also be entitled to receive a final dividend from NEX in respect of the year ending 31 March 2018, with such dividend not to exceed an amount of 7.65p per share.
CME said it expects the acquisition to generate run-rate cost synergies of US$200mln, which are anticipated to be fully achieved by the end of 2021, assuming completion in 2018. In addition to expected cost synergies, it added, there are “anticipated to be compelling revenue growth opportunities”.
CME is one of the world’s biggest exchange groups that owns the Chicago Board of Trade (CBOT) and the Chicago Mercantile Exchange while NEX is a financial technology company that matches buyers and sellers of bonds, swaps and currencies. A combination of the two would create a cross-border trading powerhouse.
NEX, which was previously called ICAP until the sale of its voice broking business to TP ICAP in 2016, was founded by its chief executive, Michael Spencer, a former treasurer of the Conservative Party.
Industry changing transaction
Commenting on the acquisition, NEX’s chief executive officer said: "The combination of NEX and CME will be an industry-changing transaction. Bringing together cash and futures products and OTC services will be unique, offering clients improved access to trading, greater financial efficiencies and highly valuable data sets. The technology and innovation opportunities will be diverse and extraordinary.”
He added: “CME's decision to choose London as its European headquarters is also a signal of tremendous support for Britain's financial services sector."
CME's chairman and CEO Terry Duffy, said. "At a time when market participants are seeking ways to lower trading costs and manage risk more effectively, the acquisition will allow us to create significant value and efficiencies for our clients globally."
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