This press release does not constitute or form part of, and should not be construed as, an offer or solicitation of an offer to buy or sell shares nor a recommendation, investment advice, solicitation, invitation or offer to buy or sell financial information, products, solutions or services, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied upon, in connection with, any contract or investment decision.
The terms and conditions in relation to any such public takeover offer will have to be approved by the Spanish National Securities Market Commission (Comisión Nacional del Mercado de Valores) and, to the extent legally required, will be published and made available, among others, at its registered offices and website.
The public takeover offer will only be made in Spain. No public takeover offer or solicitation thereof will be made, directly or indirectly, in any other jurisdiction, including the United States of America, except in compliance with, or under the exceptions provided in, any applicable securities rules or takeover regulations. The distribution or publication of this press release in certain jurisdictions may also be restricted by law and persons into whose possession this press release comes should inform themselves about and observe any such restrictions.
This press release may include statements, estimates, opinions and projections with respect to anticipated future performance (“forward-looking statements”) which reflect various assumptions which have not been independently verified or assessed by SIX and which may or may not prove to be correct. Any forward-looking statements reflect current expectations based on various other assumptions and involve significant risks and uncertainties and should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. Any forward-looking statements only speak as of the date when this press release is distributed.
The combination of BME and SIX, both of which are leaders in their domestic financial markets, would create a diversified group with a strong presence across Europe. In addition, SIX believes that the proposed transaction represents an attractive financial proposition for the current shareholders of BME. SIX believes that this transaction will strengthen both Spanish and Swiss ecosystems, by creating centres of excellence and bringing new capabilities to BME and SIX participants as well as attracting new global capital pools to Spain and enhancing Swiss asset managers’ presence in the EU.
The key terms of the tender offer are:
- All-cash voluntary tender offer for 100% of the share capital of BME for EUR 34.00 per share, implying a total equity value of EUR 2,843 million1 (CHF 3,108 million2) (the “Offer”)
- The Offer represents a premium of 47.6% over BME’s 6-month volume weighted average share price and 33.9% over its closing price of EUR 25.40 on 15 November 20193
- The Offer will be subject to the following conditions and requirements: minimum acceptance level of at least 50% plus one share of BME’s share capital; authorization of the transaction or non-opposition by the Spanish National Commission on Markets and Competition (CNMC) and the Spanish Securities Exchange Commission (CNMV); and approval from the Spanish Government.
- SIX expects to keep BME’s stand-alone listing in the Madrid, Barcelona, Bilbao and Valencia Stock Exchanges. If legal applicable squeeze-out thresholds are met, a de-listing may be considered
- The combined business will continue to focus on meeting the needs of both BME’s and SIX’s customers and regulators
The application for authorisation of the Offer, including the prospectus, has been filed today with the CNMV and the acceptance period and closing of the transaction are expected in H1 2020, following receipt of the relevant approvals.
Romeo Lacher, Chairman of the Board SIX, said today: “A combination with BME will bring direct and immediate benefits to the stakeholders of both our institutions, at a time when consolidation in global financial markets infrastructure is accelerating. This is in line with SIX’s growth strategy and our commitment to serve customers with highly reliable infrastructure services and seamless access to capital markets.”
Jos Dijsselhof, CEO SIX, said “BME will benefit from SIX’s expertise across the value chain, an opportunity to become the EU-hub for the world’s largest asset pool, SIX’s strengths in financial information and distributed ledger technology, as well as its global reach. It is intended that BME will continue to operate independently with its existing management team, regulated by the CNMV as now. With our combined scale efficiencies in technology and securities services, as well as the development of centers of excellence to support best practices and an enhanced product range for both companies, this is a highly compelling combination. This proposed transaction will give us the capability to invest in both groups and create a very strong platform to compete and innovate in the global financial market infrastructure sector.”
Step-change in scale and growth potential for BME and SIX
BME and SIX have comparable, vertically-integrated and diversified, profitable, business models, operating along the entire value chain (pre-trade, trade, post-trade). Through the proposed combination, BME and SIX together would become the 3rd-largest financial market infrastructure group in Europe, creating an entity with the scale to pursue more ambitious growth opportunities and strategic initiatives.
SIX’s core Swiss financial markets infrastructure services and full client offering would be enhanced by BME’s expertise in areas such as fixed income, derivatives, indices and clearing. Additionally, the proposed transaction would enable SIX to offer EU trading, clearing and central securities depository solutions, thus broadening the organization’s proposition for customers, including access to BME’s emerging and growth markets network. SIX will continue to operate under the Swiss Federal Council’s trading venues regime, which has successfully been in place since July 2019.
SIX intends to preserve and strengthen BME’s positioning in Spain by keeping, at least for a transitional period of 4 years, the current brands of BME and BME’s current business activities, headquarters, office locations and its strategy in Spain. SIX is planning to keep a sufficient degree of independence for BME’s business.
SIX has developed blockchain and distributed ledger technology solutions and is developing digital asset infrastructure services to enhance BME’s client offering. Over a period of three years, in discussions with regulators, SIX intends to select the optimal platforms for an efficient and customer-oriented service offering.
The proposed transaction would create the potential for Swiss asset managers to enhance their presence in the European Union, leveraging BME’s capabilities as the preferred platform of the combined business to carry out new potential ventures and business opportunities in this region. Furthermore, SIX’s plan is for BME to be the business hub and interconnection with the Latin American markets, and to increase the appeal for BME’s Latin American and MEA partnerships across all services.
SIX believes that the proposed transaction would allow both companies to enhance their home market positions and strengthen Europe’s importance in global markets. It would also create new opportunities for growth, increased investment capability and bring further strategic flexibility for both companies by becoming one of the world’s most significant financial markets infrastructure groups.
Regarding the proposed governance model, SIX expects to broaden the SIX Group management team and align its structure and composition with the new enlarged footprint. The Board of BME would also reflect the new ownership structure of BME, with SIX appointing the majority of its members. SIX intends to ensure that Spanish representatives comprise the majority of the Board, which would also include independent directors. Additionally, SIX would nominate to its own Board of Directors two independent individuals of Spanish nationality or permanent residence in Spain.
For the purposes of safeguarding the orderly functioning of the market and to avoid distortions, SIX will be prepared to consider certain conditions or commitments that may be requested by the competent authorities with respect to BME, regarding matters such as location, market integrity and stability, governance model, regulatory capital, fees and commissions, significant transactions involving BME or the regulated entities, international business or other reasonable commitments or conditions in relation to the operations of BME.
Measures shall be taken to ensure that those functions which are intrinsic to the BME’s regulated subsidiaries (as well as such personnel and technology necessary for their functioning) shall be maintained in Spain (without prejudice to any strategic decisions that may be taken in order to improve or enhance the services provided out of the market infrastructures of BME) on the terms to be specified as part of the authorisation procedure before the CNMV and the Spanish Government. In this respect, SIX plans to maintain the registered office of the regulated entities in Spain.
BME Clearing and Iberclear will have the necessary regulatory capital required to carry out their business in a manner consistent with applicable legislation and any additional regulatory capital levels that may be required by the CNMV or the regulatory authorities. In any case, they will be fully capitalised as required to comply with any statutory obligations.
The price of the Offer is EUR 34.00 per share of BME (the “Offer Price”), implying the maximum amount payable by SIX of EUR 2,843 million. The Offer Price will be fully-paid in cash.
The Offer Price will be adjusted downwards in the amount of EUR 0.6 per BME’s share corresponding to the interim dividend whose distribution is expected for 30 December 2019, as long as the settlement of the Offer is carried out after the ex-dividend date (i.e., 24 December 2019). In addition, the Offer Price will be also adjusted downwards if BME announces any other dividend, distribution, reserves, capital refund or any other kind of dividend to its shareholders prior to the Offer settlement.
The Offer Price implies a premium of approximately:
(i). 33.9% on BME’s trading price at the closing of the stock exchange on the date immediately prior to the filing date of this request for authorisation (EUR 25.40);
(ii). 44.1% on the volume weighted average trading price of BME’s shares during the three-month term immediately prior to the filing date of this request for authorisation (EUR 23.59); and
(iii). 47.6% on the volume weighted average trading price of BME’s shares during the six-month term immediately prior to the filing date of this request for authorisation (EUR 23.04).
SIX is strongly capitalized with an A+ credit rating from Standard & Poor’s and has sufficient financing capacity and full bank support to fund the proposed transaction in cash. The envisaged funding of the proposed transaction will preserve a strong investment grade rating for the newly combined group.
Credit Suisse is providing SIX with a fully underwritten bridge facility for the funding need of the proposed transaction (assuming 100% acceptance level). The bridge facility is expected to be refinanced by an optimal mix of existing resources and long-term debt market instruments. SIX has recently secured the monetization of a part of its stake in Worldline worth c. EUR 500m via an equity collar transaction, has a significant amount of available cash on balance sheet and ample untapped debt financing capacity.
SIX is advised by Credit Suisse and Alantra (joint financial advisors) as well as Linklaters (legal advisor) on the transaction.
 Estimated based on the Offer price per share and total shares outstanding of 83,615,558
 Based on a CHF/EUR exchange rate of 0.9146 as at 15 November 2019
 The last trading day before the Offer was announced to the public
Media contacts for dedicated markets:
UK: Brunswick Group: Gill Ackers, Stuart Donnelly +44 207 404 5959
Spain: Estudio de Comunicacion: Aida Prados, Cecilia Diaz +34 91 5765250
Please do not hesitate to contact Jürg Schneider.