ZURICH (Reuters) -Swiss stock exchange operator SIX Group said on Monday it had agreed to buy Aquis Exchange Plc in a cash offer that values the business at 207 million pounds ($266.91 million), sending the London-based company’s shares soaring.
Under SIX’s offer, each Aquis shareholder will be entitled to receive 727 pence per share in cash, more than double Friday’s closing price of 330 pence.
The deal comes at a time of high competition in the European exchange market and companies such as Aquis face ongoing demands to invest in technology and distribution.
Aquis said that while it was confident in its divisions’ growth potential, the directors “recognise that the European exchange market remains highly competitive and requires ongoing investment in technology and distribution against well-resourced peers operating with greater scale.”
Aquis shares more than doubled in early trading to be up 114% at 707 pence by 1114 GMT.
The Swiss company’s offer values the entire issued and future issued share capital of Aquis at about 207 million pounds, and implies an enterprise value of approximately 194 million pounds, according to SIX, and pays Aquis shareholders a premium of around 68% to the 6-month volume weighted average price of 433 pence per Aquis share as of Nov.
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Aquis will continue to operate under its existing brand and business model “with maximum agility”, said Bjorn Sibbern, Global Head of Exchanges at SIX.
“Consolidation has been a feature of the exchange sector since the beginning,” said Rae Maile, research analyst at Panmure Liberum, adding that it showed a corporate “taking a rather more optimistic view of the outlook” than the current price suggested.
SIX owning Aquis will increase competition for listings in London, Charles Hall, head of research at Peel Hunt said.
“European exchanges will inevitably need more scale if they are to compete against the might of the US markets.”
Founded in 2012, Aquis operates across areas including a pan-European multilateral trading facility (MTF) for cash equities covering 16 European markets, licensing of proprietary market infrastructure technologies, a UK primary listing growth market and market data, it added.
Aquis’ MTF business would extend SIX’s business beyond its home markets, and absorbing Aquis should create “the opportunity for a competitive pan-European listing venue”, SIX said.
It should also be attractive to retail brokers and improve execution quality for retail liquidity in Europe, it said.
Earlier this year, SIX CEO Jos Dijsselhof told Reuters that the company was considering striking deals to expand its data business or give it access to new asset classes.
It had ruled out bidding for the fund distribution group Allfunds after initially considering it, the CEO said.
($1 = 0.7756 pounds)
(Writing by Dave Graham. Additonal reporting Alun John and Samual Indyk.
Editing by Friederike Heine, Anousha Sakoui and Louise Heavens)
