CME specifies details of £3.9bn acquisition bid for NEX Group

Maria Nikolova

CME offers 500 pence in cash and 0.0444 new CME shares for each NEX share, thus valuing each share of NEX at 1,000 pence.

In line with yesterday’s announcement by NEX Group PLC (LON:NXG) confirming that it received a non-binding proposal from CME Group Inc (NASDAQ:CME), the boards of CME and NEX today announced they had reached an agreement on the terms of the acquisition.

In short, CME offers 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 ($5.4 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).

The boards of CME and NEX have also agreed that 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.

The CME Board anticipates the acquisition to result in run rate cost synergies of $200 million, which are anticipated to be fully achieved by the end of 2021. In order to realise the total synergies, CME expects to incur one-time cash costs of $285 million.

Once the acquisition is completed, NEX’s CEO Michael Spencer will join the CME Board. He will stay at the combined company as a Special Adviser. He also will be ambassador for the combined company working with key clients, regulators and officials in EMEA and Asia.

NEX’s headquarters will be combined with CME’s, and the combined headquarters will be located at CME’s head office in Chicago. The combined company will also maintain its European headquarters in London.

The NEX Directors, who have been so advised by Citi and Evercore as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. Accordingly, the NEX Directors are poised to recommend unanimously that NEX Shareholders vote in favour of the proposed deal.

CME and Bidco plan to finance the cash consideration from existing cash on balance sheet and third party debt.

The acquisition is set to become effective in the second half of 2018, subject to certain conditions. · The acquisition is anticipated to be immediately accretive to CME’s cash adjusted earnings per share from 2019 with fully phased in synergies, and is expected to meet or exceed all of CME’s investment criteria.

In addition to expected cost synergies, CME sees the deal as offering compelling revenue growth opportunities. CME will be able to market its existing product offering to NEX’s attractive customer base whilst CME will also benefit from the opportunity to cross sell NEX products.

Read this next

Fintech

Bitcoin payments app Strike launches in Europe

Bitcoin blockchain-based payments app Strike launched in Europe on Wednesday, allowing users in the region to buy, sell, and withdraw bitcoin (BTC).

Chainwire

Bandit Network’s Points SDK and Brave Ads Power Astar zkEVM’s Quest Platform “Yoki Origins”

“Yoki Origins,” supported by Bandit Network and Brave Ads, introduces a gamified and rewarding experience for Astar zkEVM users, marking a significant milestone in Web3 adoption.

Digital Assets

Crypto ETFs to debut in Hong Kong next week

Hong Kong has authorized six cryptocurrency-based spot ETFs set to launch on April 30, according to Bloomberg.

blockdag

BlockDAG Among The Best New Crypto To Invest In Post 8 Billion Coins Sales; More On Bitcoin Cash Futures’ Launch & Solana Positive Predictions

Explore Solana’s ATH predictions to see whether it can rise after a $17B dip? BlockDAG sells 8 billion coins in presale as Bitcoin Cash Futures launch.

Fundamental Analysis, Market News, Tech and Fundamental

Global FX Market Summary:USD, FED, German IFO ,Gold April 24 ,2024

Mixed US economic data and Fed rate hike uncertainty are causing volatility in the EUR/USD pair, while the Eurozone and gold prices add another layer of complexity.

Market News, Tech and Fundamental, Technical Analysis

EURCHF Technical Analysis Report 24 April, 2024

EURCHF currency pair can be expected to rise further toward the next major resistance level 0.9840, which stopped the pervious waves C and B, as can be seen below.

Digital Assets

Binance’s CZ could stay in prison until 2027, wife begs for mercy

Changpeng “CZ” Zhao, the founder and former CEO of Binance, has apologized for his decisions and accepted “full responsibility” in a letter to U.S. District Judge Richard A. Jones.

Digital Assets

Monex Group expands crypto business with 3iQ takeover

Monex Group has completed the acquisition of a majority stake in 3iQ Digital Holdings, Inc., a Canadian digital asset investment fund manager, as part of its strategy to expand its crypto business.

Education, Fintech, Inside View

How to Get Into Fintech: Best Tips to Succeed

The Fintech sector is experiencing significant growth, with fresh opportunities emerging rapidly.  Innovations such as machine learning and cryptocurrency are revolutionising finance, leading to a need for trained experts.

<