The board of the Baltic Exchange, home of the global ship chartering market, said on Monday it would ask shareholders to vote on a plan to prevent a single investor taking more than 10 per cent in the exchange in an attempt to guarantee its continued independence.
The exchange, which dates back to the coffee-houses of the 18th century, also proposes to return up to £7m to shareholders, reflecting its steadier financial footing after several years of losses.
Jeremy Penn, chief executive of the Baltic Exchange, said that although there was no imminent threat of a group taking over, the proposal was pre-emptive.
“There is no danger of the Baltic Exchange being taken over, but we just wanted to make sure that it is never allowed to happen,” he said. Shareholders will vote on the two proposals at a meeting on March 7.
The exchange has more than 500 shareholders, with Clarksons, the London-listed shipping service and broking group, the largest with a roughly 10 per cent stake. All shareholders are members of the exchange, and pay fees to access the pricing information that the exchange provides of key shipping routes.
Under current rules, individual member companies are not allowed to hold more than 1,500 shares out of a total of about 54,000, but there is no restriction on a member company holding more shares through a series of subsidiaries or associated undertakings.
“If this situation is allowed to continue, it could potentially threaten the tradition of widely dispersed shareholding in the Baltic and lead to an undesirable concentration of influence,” Anthony Cooke, chairman of the Baltic, wrote in a letter to shareholders.
The Baltic board of directors has also proposed to launch a limited buy-back of the exchange’s shares.
The board is recommending that up to 35 per cent of the equity be bought back at a minimum price of £375 per share.
Mr Penn said the buy-back was aimed at shareholders who were no longer active in the shipping market and wanted to quit the exchange.
The Baltic Exchange has benefited in the past three years from explosive growth in activity in the shipping derivative markets, which are referenced to its indices such as the Dry Bulk freight index.
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