Source: Saxo Bank
In a strategic move, Danish investment bank Saxo Bank A/S ("Saxo"), a global leader in on-line trading, has entered a Memorandum of Understanding with Tricom Holdings Limited ("Tricom"), Babcock & Brown and ANZ Group with a view to acquiring a 35 percent holding in the Sydney based broking house.
The proposed transaction would, when completed, reflect an important step for Saxo's long-term plan to strengthen its position in the Australian and New Zealand markets, as well as further enhancing its business throughout the Asia Pacific region.
It is intended the acquisition would include an option for Saxo to increase its holding to 100 percent within three years. The transaction is subject to completion of final due diligence and regulatory clearance. The new entity would enable the two organisations to build on their existing strong relationship and mutual capabilities. The business would be rebranded as Saxo Capital Markets Australia.
Under the proposal, the business would have the added benefit of the experience of Saxo's senior executive management team, global resources and corporate governance framework. Tricom's CEO, Lance Rosenberg, and staff would continue in their present roles.
This combination would enable Saxo to accelerate the development of a highly competent and profitable business. The new entity would work closely with Saxo's existing Asia Pacific operation headquartered in Singapore.
"Partnering with one of the world's leading on-line securities and currency trading house would be exciting news for our business, customers and staff," said Mr Rosenberg.
"With Saxo Bank as a partner, we will be better capitalised and a more diversified business backed by Saxo Bank's global expertise, strength and recognition."
Tricom is already a partner of Saxo Bank, having over 2,000 Tricom clients benefiting from Saxo's award winning proprietary investment trading system, SaxoTrader.
Saxo Bank's joint CEOs Kim Fournais and Lars Seier Christensen emphasised that the proposed transaction would build on the strong relationship the bank has had with Tricom for over five years.
"We look forward to working with Lance and all the employees to capture the strategic and operational synergies that would come from bringing the businesses together.
"The Australian and New Zealand markets are very important for us and we see great growth potential. Joining forces would provide us with an instant presence in terms of clients and partners together with an excellent team of dedicated staff," they said.
The Saxo joint CEOs also pointed out that Tricom's current expansion into New Zealand, Hong Kong, China and other overseas markets would mesh perfectly with Saxo's strategy.
"The combination of their talent and knowledge with Saxo Bank's business model and worldwide network would become a very powerful offering to the benefit of clients, partners and existing staff.
"Saxo Bank is active in the Australian and New Zealand markets through its unique White Label Partnership arrangements with Tricom as well as several other financial institutions. One of the benefits of the proposed acquisition is that by being much closer to its clients and partners, Saxo Bank would be better positioned to service their needs and identify new opportunities," they said.
The proposed transaction follows Saxo Bank's acquisition in September 2007 of Geneva based Synthesis Bank - an online investment bank. In November 2007, Citi chose Saxo Bank as its global partner for its online FX offering based on the SaxoTrader platform.
The transaction is expected to be completed in early June 2008 and will be funded from Saxo Bank's existing cash reserves and facilities. It is expected that post-transaction both Babcock & Brown and ANZ Group would continue to have an equity interest in the business.