Saxo Bank A/S (Saxo Bank) and Disruptive Capital Acquisition Company Limited (DCAC) have confirmed their intent to explore a listing of Saxo Bank on Euronext Amsterdam in connection with a business combination with DCAC.

Saxo Bank is well capitalised, so there will be no primary issue of shares by Saxo Bank. The proposed Business Combination would comprise a secondary sale of existing Saxo Bank shares to DCAC for distribution to DCAC’s shareholders; and the subsequent delisting and liquidation of DCAC, with Saxo being the ongoing Euronext listed entity.

DCAC is soliciting interest from its existing shareholders and other investors in the secondary offer.

The purpose of the potential listing of Saxo Bank is to diversify its shareholder base, raise its profile and so further accelerate its growth strategy.

Saxo Bank shareholders Geely Financials Denmark A/S and Sampo Plc intend to sell a limited proportion of their shareholding. Certain members of Saxo Bank’s board and senior management team, including its founder and CEO Kim Fournais, intend to acquire additional shares alongside DCAC, should the Business Combination proceed.

The potential transaction values the outstanding shares of Saxo Bank (before a Business Combination) at a pro forma aggregate amount of at least €2 billion. Saxo Bank recently reported first-half revenue of USD $288 million and Net Profit of $41 million – both improved from 2H-2021 but down from 1H-2021 – meaning that the proposed valuation will be in the neighborhood of 3.5x annual revenue, and 24x earnings.

Geely Group bought its original 51% stake in Saxo Bank in 2018 at a valuation for Saxo Bank in the €1.325 billion range, so an exit at €2 billion, if completed, would represent a healthy profit for Geely on its original investment.

We’d also note that the announcement follows the failure of a similar transaction for rival FX/CFDs broker eToro. eToro cancelled its SPAC-IPO plans (for a US NASDAQ listing) in early July, although it was pursuing a much loftier valuation of more than $8 billion.

No binding agreement has been entered into, and there can be no assurance that a Business Combination nor listing of Saxo Bank shares will be achieved.

Kim Fournais, CEO & Founder, comments:

“We have a strong ownership, which we hope to strengthen and diversify even further, with full confidence that Saxo Bank is heading in the right strategic direction. We are building a prudent financial institution that is part of the solutions needed in the future – and we remain committed to delivering on our ambitious growth strategy. With this, I am proud to invite new shareholders into Saxo and the exciting growth journey ahead of us.”

DCAC co-founder, Edi Truell, comments:

“We are thrilled to have identified Saxo Bank as a high quality financial services combination for DCAC shareholders. We look forward to bringing our shareholders aboard on Saxo’s exciting journey, which we believe should provide a very attractive investment”

JP Morgan is acting as placement agent in connection with the proposed Business Combination.