April 21, 2011
-- An interesting news item surfaced on Bloomberg yesterday, quoting an article in Danish newspaper Borsen, that unnamed US private equity firms were close to buying a 33% stake in Saxo Bank for 5 billion DKK (approximately $975 million) – valuing Saxo Bank at nearly $3 billion!
Specifically, the Borsen article reports that Saxo Bank shareholder General Atlantic (22%) has hired investments banks JP Morgan and SEB Enskilda to sell its stake, alongside (possibly) the 9.9% interest in Saxo Bank held by Portugal’s Espirito Santo Financial Group. (Most of the remaining 67% of Saxo Bank is held by its co-founders Kim Fournais and Lars Seier, and other employees). And, reports Borsen, a deal is close.
While we would not be at all surprised by a transaction whereby new private equity investors buy out the existing outside investors in Saxo Bank – such “flipping”
transactions happen all the time, across many different industries – we would be surprised by these suggested terms and valuations. By comparison, FXCM – which did more volume and earned more net profit than Saxo Bank in the second half of 2010 – is currently trading at a market cap of about $825 million, or less than a third of the rumored price for Saxo Bank. And as we point out in our Online Forex Industry Report, M&A valuations in the sector tend to be well below publicly traded multiples.
For more details and links to the original articles see LeapRate’s Forex Industry News page at http://www.leaprate.com/News.html
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