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

Digital Assets

Germany-focused DekaBank taps METACO for digital asset custody offering

“Digital assets are a critical part of the future, a radical new way for how assets will be represented, from currencies to real estate.”


Eventus launches AML solution for TradFi and digital asset space

“Firms operating in traditional financial markets and digital assets alike are facing greater challenges than ever to protect themselves from those presenting a risk to their businesses and reputations, along with their standing with government regulators.”

Industry News

Qomply launches direct-to-FCA trade report solution that bypasses ARM

“Certainly, for back-reporting large volumes of data, QomplyDirect removes extra ARM fees by offering the flexibility of sending reports directly to the FCA via a firm’s own infrastructure.”

Executive Moves

BNP Paribas AM appoints Geoff Dailey as Deputy Head of US Equities

“Geoff has more than 20 years’ experience in the industry and as a key, senior member of the team with a strong investment pedigree and leadership profile, he is the natural successor for Pam.”

Retail FX

BUX joins forces with BlackRock for iShares ETFs offering in 7 European countries

“By joining forces with Blackrock, a renowned expert in financial markets and products, we have created a good solution for clients that are overwhelmed by the choice of products and don’t know how and when to start investing. Together, BUX and BlackRock can make a real impact on how Europeans invest and approach their financial future.”

Retail FX

CMC Invest gets in-principle approval to launch shares, ETFs, futures, and options in Singapore

“This announcement is a major milestone and validation for CMC Markets. Our business has been offering CFDs in Singapore since 2007, but the Capital Markets Services Licence for CMSI will allow us to serve our clients with more robust investment products, including shares and ETFs.”

Executive Moves

Eightcap hires ex-IG, ex-StoneX Alex Howard as CEO

“In my first weeks, the priority is to immerse myself in the business, including connecting with the global team, developing a nuanced understanding of strategy and operations, and listening to clients.”

Digital Assets

OneCoin founder Ruja Ignatova is selling penthouse in UK

OneCoin founder Ruja Ignatova, who steered one of the world’s biggest cryptocurrency frauds, is back into the spotlight more than five years after vanishing from the public eye.

Digital Assets

Bitpay taps MoonPay to offer access to +60 cryptocurrencies

Crypto payment service provider Bitpay said it’s partnering with exchange and web3 infrastructure provider MoonPay to provide its users with easier access to buy cryptocurrency instantly.