Statement by the Board of Directors of Cinnober Financial Technology in relation to the public offer from Nasdaq

The Board of Directors of Cinnober Financial Technology has based on a financial and strategic short- and mid-term perspective concluded to unanimously recommend that the shareholders and warrant holders of Cinnober Financial Technology accept the public offer made by Nasdaq.

Background

This statement is made by the Board of Directors (the “Board of Directors”) of Cinnober Financial Technology Aktiebolag (publ) (the “Company”, “Cinnober Financial Technology” or “Cinnober”) pursuant to Rule II.19 of the Swedish Corporate Governance Board’s takeover rules for certain trading platforms (the “Takeover Rules”).

Nasdaq, Inc. is a company incorporated in the state of Delaware, United States, with shares listed on NASDAQ under the symbol “NDAQ” in United States (“Nasdaq”). Nasdaq Technology AB, a wholly owned subsidiary to Nasdaq has today announced a public cash offer to the shareholders and warrant holders of Cinnober to transfer all of their shares and warrants in Cinnober to Nasdaq for a consideration of SEK 75 per Cinnober share and SEK 85 per Cinnober warrant in cash (the “Offer”).

The total value of the Offer, based on all outstanding shares and warrants, is approximately SEK 1,702 million[1] and represents a premium of:

• approximately 22.0 percent compared to the closing price of SEK 61.50 for the Cinnober share on Nasdaq First North on 13 September 2018, which was the last trading day prior to the announcement of the Offer;

• approximately 28.7 percent compared to the volume weighted average price paid of SEK 58.29 for the Cinnober share on Nasdaq First North during the last 30 trading days prior to announcement of the Offer; and

• approximately 31.1 percent compared to the volume weighted average price paid of SEK 57.20 for the Cinnober share on Nasdaq First North during the last 90 trading days prior to announcement of the Offer.

The acceptance period of the Offer is expected to commence on or around October 29, 2018 and expire on or around December 14, 2018, subject to any extensions.

Completion of the Offer is conditional upon customary conditions, inter alia, being accepted to such an extent that Nasdaq becomes the owner of more than 90 percent of the total number of shares in Cinnober, after full dilution, as well as the receipt of all necessary regulatory or similar clearances, approvals and decisions, including from competition authorities, in each case on terms which, in Nasdaq’s opinion, are acceptable. Nasdaq has reserved the right to waive this and other completion conditions according to the Offer. The Offer is not conditional upon financing. For further details about the Offer, please refer to Nasdaq’s press release.

The Board of Directors of Cinnober has, at the written request of Nasdaq, permitted Nasdaq to carry out a limited confirmatory due diligence review of Cinnober in relation to the preparation for the Offer. Nasdaq has not received any inside information relating to Cinnober in connection with its due diligence review.

Nils-Robert Persson, Chairman of the Board of Directors of Cinnober, holding 15.1 percent of the total number of shares and votes in Cinnober[2], and Peter Lenti, co-founder and Board member of Cinnober, holding 3.2 percent of the total number of shares and votes in Cinnober[3], whose combined shareholding in Cinnober represents approximately 18.3 percent of the total number of shares and votes, have expressed their support for the Offer and intend to accept it.

Lazard is acting as exclusive financial adviser and Hamilton Advokatbyrå is acting as legal adviser to Cinnober Financial Technology.

The Board of Directors’ recommendation

Cinnober provides solutions and services to leading trading and clearing venues, including exchanges, clearinghouses, banks and brokers. Cinnober’s solutions are largely based on the TRADExpress™ Platform, incorporating everything needed for mission-critical solutions in terms of performance, robustness and flexibility. The portfolio of offerings includes price discovery and matching, real-time risk management, clearing and settlement, index calculation, data distribution and market surveillance. In 2017, Cinnober launched the business areas Simplitium, Minium and Irisium with the aim to expand the customer base by offering both niche and standardized solutions. Focus now is in existing business lines and a return to profitability.

The evaluation of the Offer must be made in relation to the Company’s present position and the opportunities available going forward as well as the risks associated with the future developments and its strategy. In that respect, the Board of Directors has taken a number of factors into account which the Board of Directors has deemed relevant to the evaluation of the Offer. These factors include, but are not limited to, the Company’s present strategic and financial position and the Company’s potential future development and the thereto related opportunities and risks.

The Board of Directors note that the Company is currently not profitable and has stated in its Q2 2018 report that the Company works towards returning to profitability in 2019. In the Board of Directors’ opinion, Cinnober has a viable strategy going forward, however the Board of Directors views a combination of Cinnober and Nasdaq as positive and believes it to be strategically merited as the Company transitions to a more diversified product offering and a larger and different customer base. The Board of Directors has full confidence in the management’s ability to execute on the Company’s current stated strategy but also recognizes that there are risks attached to the recently launched business areas reaching its anticipated profitability levels. With Nasdaq as the new owner, the Company can benefit from a renowned name with a sound financial base which in the short- and mid-term perspective will accelerate the Company’s strategy to focus on its existing business lines and return to profitability, and in the long-term perspective Nasdaq will serve as a stable owner and a good home for the Company.

The Board of Directors notes that the Offer implies a premium of approximately 22.0 percent compared to the closing price of SEK 61.50 for the Cinnober share on Nasdaq First North on 13 September 2018 and a premium of approximately 28.7 percent and 31.1 percent compared to the volume weighted average price for the Cinnober share on Nasdaq First North during the last 30 and 90 trading days, respectively, prior to announcement of the Offer.

When evaluating the Offer, the Board of Directors notes that two large shareholders and co-founders representing approximately 18.3 percent of the shares and votes in the Company have expressed support for the Offer and intend to accept it.

The Board of Directors also take into consideration that there have been previous takeover discussions with other industrial companies, and it is the Board of Directors’ fiduciary duty to evaluate options.

The Board of Directors deem the terms of the Offer at such levels that the overall assessment is that it is the Board of Directors’ fiduciary duty to facilitate the Offer to be put forward to the shareholders and warrant holders of Cinnober to make their own decision of the Offer, and furthermore note that a recommendation by the Board of Directors is responsive to Nasdaq’s request.

On this basis, the Board of Directors unanimously recommends the shareholders and warrant holders of Cinnober to accept the Offer.

Under the Takeover Rules, the Board of Directors must, based on the statements made by Nasdaq in its press release issued earlier today, present its opinion regarding the impact that the implementation of the Offer will have on Cinnober, particularly in terms of employment, and its opinion regarding Nasdaq’s strategic plans for Cinnober and the effects it is anticipated that such plans will have on employment and on the places in which Cinnober conducts its business. In this respect, the Board of Directors notes that Nasdaq has stated that:

“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.”

The Board of Directors has no reason to question these statements.

This statement shall in all respects be governed by and construed in accordance with Swedish law. Disputes arising from this statement shall be settled exclusively by Swedish courts.

Stockholm, September 14, 2018

Cinnober Financial Technology Aktiebolag (publ)

The Board of Directors

For additional information please contact:

Chairman of the Board of Directors

Nils-Robert Persson 

Phone: +46 (0) 70 552 52 28 

E-mail: nils-robert@cinnober.com 

Cinnober Financial Technology Aktiebolag (publ)

Corp. Reg. No. 556548-9654

Kungsgatan 36

111 35 Stockholm, Sweden

About Cinnober

Cinnober provides solutions and services to leading trading and clearing venues, including exchanges, clearinghouses, banks and brokers. Cinnober’s solutions are largely based on the TRADExpress™ Platform, incorporating everything needed for mission-critical solutions in terms of performance, robustness and flexibility. The portfolio of offerings includes price discovery and matching, real-time risk management, clearing and settlement, index calculation, data distribution and market surveillance. 

Cinnober’s customers include the Asia Pacific Exchange, Australian Securities Exchange, B3, Dubai Gold & Commodities Exchange, Euronext, Japan Exchange Group, Johannesburg Stock Exchange, the London Metal Exchange, LME Clear, NYSE and the Stock Exchange of Thailand, among others. 

Cinnober’s shares are traded on the Nasdaq First North exchange and the company’s Certified Advisor is FNCA Sweden AB. For additional information, please visit www.cinnober.com. 

This statement has also been drafted in a Swedish language version. In case of any discrepancies between the Swedish and the English text, the Swedish text shall prevail.

The information in the press release is information that Cinnober is obliged to make public pursuant to the EU Market Abuse Regulation and the Takeover Rules. The information was submitted for publication, through the agency of the contact person set out above, at 8:20 CET on September 14, 2018.

[1] Based on 22,431,105 outstanding shares and 230,000 outstanding warrants, entitling to subscription of 690,000 shares, in Cinnober.

[2] Directly and indirectly held through companies and/or family members.

[3] Directly and indirectly held through companies and/or family members.

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