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Nasdaq Announces A Recommended Public Cash Offer To The Shareholders And Warrant Holders In Cinnober

Date 14/09/2018

Nasdaq Technology AB (”Nasdaq Technology”), a wholly-owned subsidiary of Nasdaq, Inc., hereby announces a recommended public cash offer to the shareholders and warrant holders in Cinnober Financial Technology Aktiebolag (”Cinnober”) to acquire all outstanding shares and warrants in Cinnober at a price of SEK 75 per share and SEK 85 per warrant (the ”Offer”). The Cinnober shares are listed on Nasdaq First North, Stockholm, under the ticker CINN.

Summary of the Offer

  • Nasdaq Technology offers SEK 75 in cash for each share in Cinnober.[1]
  • Cinnober has issued warrants in one series, and Nasdaq Technology offers SEK 85 per
    warrant. [2]
  • The total value of the Offer, based on all outstanding shares and warrants in Cinnober, amounts to approximately SEK 1,702m.[3]
  • The Offer represents a premium of:
    • 22.0 percent to the closing price of the Cinnober share on 13 September 2018 (the last trading day prior to the announcement of the Offer) of SEK 61.50;
    • 28.7 percent compared with the volume weighted average price paid for the Cinnober share during the last 30 trading days prior to the announcement of the Offer of SEK 58.29; and
    • 31.1 percent compared with the volume weighted average price paid for the Cinnober share during the last 90 trading days prior to the announcement of the Offer of SEK 57.20.
  • The Board of Directors of Cinnober unanimously recommends the Offer for acceptance by the shareholders and warrant holders.
  • Nils-Robert Persson, Chairman of the Board of Directors of Cinnober, and Peter Lenti, co-founder and Board member of Cinnober, holding 18.3 percent in aggregate of the total number of shares and votes in Cinnober, have expressed their support for, and stated that they intend to accept, the Offer.
  • None of Nasdaq, Inc. or Nasdaq Technology currently owns or controls any shares in Cinnober.
  • An offer document regarding the Offer is expected to be published at the end of October 2018. The acceptance period for the Offer is expected to commence around 29 October 2018 and end around 14 December 2018. The timetable for the Offer has been set to reflect the review periods of the relevant competition authorities.

Background and Offer rationale

Nasdaq’s world-leading market technology powers more than 250 of the world’s market infrastructure organizations and market participants, including broker-dealers, exchanges, clearinghouses, central securities depositories and regulators, in over 50 countries with end-to-end, mission-critical technology solutions.

Cinnober’s technology, talent and development capabilities will help Nasdaq to accelerate strategic initiatives to both extend the depth and breadth of the market infrastructure technology stack and expand into new segments, including industries outside of capital markets. Cinnober’s client base will add to Nasdaq’s robust ecosystem of capital markets constituents and will accelerate Nasdaq’s effort to expand its technology offerings to the broader markets economy. Additionally, Cinnober’s capabilities in Stockholm and Umeå are attractive to Nasdaq as they continue to leverage Nasdaq’s substantial development operations in Sweden as a prominent technology hub to the capital markets industry.

By leveraging the combined intellectual capital, technology competence and capabilities of both organizations, the combined group will be able to deliver the most advanced technology platforms and services across the trade lifecycle, with the speed, agility and scale to respond to customer needs as the industry evolves.

Adena Friedman, President and CEO of Nasdaq, Inc., commented:

“The combined intellectual capital, technology competence and capabilities of Cinnober and our Market Technology business will expand the breadth and depth of our fastest growing division at Nasdaq. Not only have the global capital markets continued to evolve rapidly, new marketplaces in various industries are demanding market technology infrastructure that enables rapid growth and scale as well as access to tools to promote market integrity. This acquisition will enhance our ability to serve market infrastructure operators worldwide, and will accelerate our ability to expand into new growth segments.”

The Offer

Nasdaq Technology offers the shareholders in Cinnober SEK 75 in cash for each share and the warrant holders SEK 85 in cash for each warrant.[4] The total value of the Offer amounts to approximately SEK 1,702m.[5] If, prior to settlement, Cinnober pays dividend or makes any other value transfer to its shareholders, the Offer price will be reduced accordingly. No commission will be charged in connection with the Offer.

The Offer represents a premium of:

  • 22.0 percent to the closing price of the Cinnober share on 13 September 2018 (the last trading day prior to the announcement of the Offer) of SEK 61.50;
  • 28.7 percent compared with the volume weighted average price paid for the Cinnober share during the last 30 trading days prior to the announcement of the Offer of SEK 58.29; and
  • 31.1 percent compared with the volume weighted average price paid for the Cinnober share during the last 90 trading days prior to the announcement of the Offer of SEK 57.20.

The acceptance period for the Offer is expected to commence around 29 October 2018 and end around 14 December 2018. Settlement is expected to take place around 21 December 2018, subject to the conditions for completions having been fulfilled or if Nasdaq Technology otherwise elects to complete the Offer. The timetable for the Offer has been set to reflect the review periods of the relevant competition authorities. If all relevant competition authorities have reviewed the Offer and the acquisition of Cinnober or if Nasdaq Technology waives condition (2) below, in such time that the acceptance period can be closed before 14 December 2018, Nasdaq Technology may announce a new end date of the acceptance period, subject to that such announcement can be made not less than two weeks prior to the new end of the acceptance period.

Recommendation from the Board of Directors of Cinnober

The Board of Directors of Cinnober has unanimously recommended the Offer for acceptance by the shareholders and warrant holders in Cinnober. The statement by the Board of Directors will be announced by Cinnober today in a separate press release, and included in its entirety in the offer document that will be prepared and published by Nasdaq Technology.

Support for the Offer

Nils-Robert Persson, Chairman of the Board of Directors of Cinnober, holding 15.1 percent of the shares and votes in Cinnober,[6] has expressed his support for the Offer and stated that he intends to accept the Offer.

Nils-Robert Persson, Chairman of the Board of Directors of Cinnober, commented:

“Since co-founding Cinnober in 1998, Cinnober has been on an exciting journey and has become a leading supplier of financial technology providing services to exchanges and trading houses worldwide. I see the Offer as the next step in Cinnober’s development as it will enable Cinnober and its highly talented employees to be even more successful in serving customers as well as expanding its technology and offering to even more customers and segments. I really believe in the strategic logic of combining Cinnober and Nasdaq’s market technology business also as it reinforces the strong technology foundation in Sweden. As the largest shareholder of Cinnober, I am supportive of the Offer and intend to accept the Offer.”

Peter Lenti, co-founder and Board member of Cinnober, holding 3.2 percent of the total number of shares and votes in Cinnober,[7] has also expressed his support for the Offer and stated that he intends to accept the Offer.

In total, the support statements correspond to 18.3 percent of the total number of shares and votes in Cinnober.

Nasdaq, Inc. and Nasdaq Technology’s shareholding in Cinnober

None of Nasdaq, Inc. or Nasdaq Technology owns or controls any shares in Cinnober. Furthermore, none of Nasdaq, Inc. or Nasdaq Technology holds any other financial instruments that provide a financial exposure to the shares in Cinnober. None of Nasdaq, Inc. or Nasdaq Technology has acquired or agreed to acquire any shares in Cinnober or any financial instruments that provide a financial exposure to Cinnober shares during the last six months prior to the announcement of the Offer.

Conditions for completion of the Offer

Completion of the Offer is conditional upon:

  1. the Offer being accepted to such extent that Nasdaq Technology becomes the owner of more than 90 percent of the total number of shares in Cinnober, after full dilution;
  2. the obtaining of all, with respect to the Offer and completion of acquisition of Cinnober, necessary regulatory approvals or similar clearances, approvals and decisions, including from competition authorities, in each case on terms acceptable to Nasdaq Technology;
  3. no third party announces an offer to acquire the shares in Cinnober on terms that are more favourable to the shareholders of Cinnober than the terms of the Offer;
  4. neither the Offer nor the acquisition of Cinnober being wholly or partly, actually or reasonably anticipated to be, prevented or materially adversely affected by any legislation or other regulation, court decision, public authority decision or similar circumstance that is at hand or can reasonably be anticipated, that Nasdaq Technology could not reasonably have foreseen at the time the Offer was disclosed;
  5. there being no circumstances outside the control of Nasdaq Technology that have had or reasonably could have a material adverse effect upon Cinnober’s sales, results, liquidity, equity, net indebtedness or assets;
  6. no information publicly announced by Cinnober, or otherwise disclosed in writing to Nasdaq Technology prior to the announcement of the Offer, being materially inaccurate, incomplete or misleading, and Cinnober having made public all information which should have been made public by it; and
  7. Cinnober does not take any actions that would typically be intended to adversely affect the conditions for the successful completion of the Offer.

Subject to applicable law, Nasdaq Technology reserves the right to withdraw the Offer in the event it becomes clear that any of the above conditions are not fulfilled or cannot be fulfilled. Regarding conditions (2) to (7), the Offer may only be withdrawn if the non-fulfilment of such condition is of material importance to Nasdaq Technology’s acquisition of Cinnober.

Nasdaq Technology reserves the right to, wholly or partly, waive one or more of the above conditions, which, inter alia, includes the right for Nasdaq Technology to complete the Offer at an acceptance level of less than 90 percent.

Regulatory review

The acquisition of Cinnober may be subject to review by relevant competition authorities and Nasdaq Technology assesses that there is a reasonable opportunity that such reviews are completed prior to the end of the acceptance period.

Financing of the Offer

The Offer is not subject to any financing condition. Nasdaq Technology will finance the Offer using Nasdaq, Inc.’s cash on hand and/or rely on Nasdaq, Inc.’s existing credit facilities.

Overview of Nasdaq Technology and Nasdaq, Inc.

Nasdaq Technology AB, reg. no. 556314-8138, is a private limited liability company founded and registered in Sweden, and the address is Tullvaktsvägen 15, 105 78 Stockholm. Nasdaq Technology is a wholly-owned subsidiary to Nasdaq, Inc. and develops systems for order generation, trade or exchange activities, clearing activities and back-office administration.

Nasdaq, Inc. is a Delaware (US) corporation with shares of its common stock listed on The Nasdaq Stock Market in New York, US, and traded under the symbol NDAQ. Based on the closing price of Nasdaq, Inc.’s shares on 13 September 2018 the company’s market capitalization is approximately USD 15.1bn. Nasdaq, Inc. is a leading global provider of trading, clearing, exchange technology, listing, information and public company services. Through its diverse portfolio of solutions, Nasdaq enables customers to plan, optimize and execute their business vision with confidence, using proven technologies that provide transparency and insight for navigating today’s global capital markets. As the creator of the world’s first electronic stock market, its technology is used by more than 250 of the world’s market infrastructure organizations and market participants, including broker-dealers, exchanges, clearinghouses, central securities depositories and regulators in 50 countries (including among others Nasdaq Stockholm and Nasdaq First North). Nasdaq is home to approximately 4,000 total listings with a market value of approximately USD 14 trillion.

Due diligence

Nasdaq Technology has, in connection with its preparation for the Offer, conducted a limited due diligence review of Cinnober inter alia to confirm the information that Cinnober has made public. During the due diligence review, Nasdaq Technology has reviewed business, financial, legal and other information. Cinnober has informed Nasdaq Technology that no information that has not already been disclosed by Cinnober, and that is considered inside information, has been provided to Nasdaq Technology during the due diligence review.

Cinnober employees

Nasdaq Technology and Nasdaq, Inc. recognize the capabilities and skills of Cinnober’s dedicated management and employees and look forward to welcoming these talented individuals to the Nasdaq group. After the completion of the Offer and a careful review of the capabilities and needs of the new combined operations, the optimal structure for future success will be determined. There are currently, before completion of the Offer, no decisions on any material changes to Cinnober’s employees and management or to the existing organization and operations, including the terms of employment and locations of the business.

Indicative timetable[8]

End of October 2018                                                                   Announcement of offer document

Around 29 October 2018 – 14 December 2018                          Acceptance period

Around 21 December 2018                                                         Commencement of settlement

Nasdaq Technology reserves the right to extend the acceptance period following the acceptance period, as well as to postpone the settlement date. Any extensions of the acceptance period or postponements of the settlement date will be announced by a press release in accordance with the Takeover Rules (see definition below), applicable laws and other regulations.

Compulsory redemption and delisting

In the event that Nasdaq Technology, whether in connection with the Offer or otherwise, obtains more than 90 percent of the shares of Cinnober, Nasdaq Technology intends to initiate a compulsory redemption procedure with respect to the remaining shares in accordance with the Swedish Companies Act (Sw. aktiebolagslagen (2005:551)). In connection with such compulsory redemption procedure, Nasdaq Technology intends to promote a delisting of Cinnober’s shares from Nasdaq First North.

Applicable law and disputes

The Offer is governed by and construed in accordance with the substantive laws of Sweden. Any dispute, controversy or claim arising out of or in connection with the Offer, shall be settled exclusively by Swedish courts, and the District Court of Stockholm (Sw. Stockholms tingsrätt) shall be the court of first instance.

The Takeover Rules for certain trading platforms issued by the Swedish Corporate Governance Board 1 April 2018 (the ”Takeover Rules”) and the Swedish Securities Council’s (Sw. Aktiemarknadsnämnden) rulings and statements regarding interpretation and application of the Takeover Rules, including, where applicable, the Swedish Securities Council’s interpretation and application of the Swedish Industry and Commerce Stock Exchange Committee’s (Sw. Näringslivets Börskommitté) rules previously applicable to public takeover offers, are applicable to the Offer.

Advisors

In connection with the Offer, SEB is acting as financial advisor, and Advokatfirman Cederquist is acting as legal advisor as to Swedish law, to Nasdaq, Inc. and Nasdaq Technology.