CME Group launches senior unsecured notes offering to raise cash for NEX acquisition

Further to earlier reports about the planned acquisition of NEX Group PLC (LON:NXG) by CME London Limited (Bidco) and CME Group Inc (NASDAQ:CME), CME today announces that it has launched an underwritten public offering of senior unsecured notes. The Notes are expected to be denominated in US dollars.

CME Group plans to use the net proceeds from the offering of the Notes to finance, in part, the cash consideration to paid to NEX shareholders pursuant to the acquisition. If completed, the net proceeds of the Notes will be deposited into an escrow account in the name of CME Group, and such proceeds are expected to reduce the commitments under CME Group’s bridge credit facility. CME Group still expects the Acquisition to close in the second half of 2018.

CME Group will provide prospective investors with a preliminary prospectus supplement (the “Preliminary Prospectus Supplement”) and will publish a roadshow presentation (the “Roadshow Presentation”).

As per the agreement, CME will pay 500 pence in cash and 0.0444 new CME shares for each NEX share, thus valuing each share of NEX at 1,000 pence. NEX’s entire issued and to be issued share capital is thus valued at approximately £3.9 billion. The bid represents a premium of approximately 49.2% to the Closing Price per NEX Share of 670.5 pence on 15 March 2018 (being the date the Offer Period commenced).

In addition, NEX Shareholders will be entitled to receive a final dividend for NEX in respect of the year ending March 31, 2018, such dividend not to exceed an amount of 7.65 pence per NEX Share.

Regarding the rationale for the deal, the CME Board believes the acquisition represents an opportunity to create a leading, client-centric, global markets company, generating significant efficiencies across futures, cash and OTC products at a time when market participants are seeking to lower their cost of trading and better manage risk. The deal will also improve offering to customers through the complementary combination of CME’s exchange-traded derivative products and NEX’s OTC products.

The acquisition is expected to expand CME’s international footprint and client base in EMEA and APAC.