Saxo Bank Hires Goldman Sachs to Guide Potential IPO or Sale

Saxo Bank hires Goldman Sachs for strategic review, exploring IPO or sale amid recent performance declines.

Key Points

• Saxo Bank‘s shareholders, including Geely Group, Kim Fournais, and Mandatum Group, have launched a strategic review, considering options such as a sale or IPO. Goldman Sachs has been appointed as the financial advisor to guide this process.
• Saxo Bank has experienced a downturn in performance, including its first semi-annual loss in several years and a significant drop in trading volumes. The company has also stopped onboarding clients in several countries.
• In 2022, Saxo Bank attempted an IPO through a SPAC merger valued at around €2 billion but ultimately pulled the deal.

Saxo Bank has officially announced that its key shareholders—China’s Geely Group, co-founder and CEO Kim Fournais via Fournais Holding A/S, and Finland’s Mandatum Group—are embarking on a strategic review of the company’s future. The move aims to position Saxo for optimal growth, enhance its service to clients and partners, and foster a robust company culture.

Saxo Bank and its shareholder group have appointed Goldman Sachs (NYSE: GS) as their financial advisor to navigate this critical juncture. The prestigious investment bank will guide Saxo by exploring strategic opportunities, potentially including a sale of the company, an initial public offering (IPO), or both.

Historically, such strategic reviews signal that shareholders are contemplating an exit strategy. Goldman Sachs’s involvement suggests a dual approach: evaluating the feasibility of an IPO on a major stock exchange or managing a potential merger and acquisition (M&A) process. Typically, investment banks receive a modest upfront retainer, with a substantial fee contingent upon a successful transaction.

Saxo Bank Hires Goldman Sachs to Guide Potential IPO or Sale

In April, reports emerged that Saxo Bank was talking with potential advisors to explore a sale. Geely Group, holding just under 50%, and Mandatum, with just under 20%, have expressed their desire to divest their interests in Saxo Bank.

Saxo Bank‘s previous attempt to go public in 2022 through a merger with a Euronext Amsterdam-listed particular purpose acquisition company (SPAC) valued the firm at approximately €2 billion. This transaction aimed to provide liquidity to Geely and Sampo (which later transferred its stake to Mandatum). However, they ultimately withdrew the deal later that year.

Goldman Sachs, renowned for its expertise in investment banking, faces a challenging task. Saxo Bank’s performance has recently faltered, marked by its first semi-annual loss in several years during the latter half of 2023, with stagnant top-line growth. While Saxo has not disclosed its financial results for the first half of 2024, preliminary indicators suggest continued difficulties. Following a 20% drop in May, client trading volumes further declined in June 2024, totaling $371.6 billion — a 4% decrease from the previous month. Saxo’s core FX trading volumes fell to a multi-year low of $78.1 billion in June.

Moreover, Saxo Bank has begun the second half of 2024 by informing institutional partners of its decision to cease onboarding clients in several countries, including Brazil, Canada, China, Cyprus, Egypt, India, Indonesia, New Zealand, South Africa, Taiwan, and Turkey.

As Saxo Bank embarks on this strategic review with Goldman Sachs, the financial community will be watching closely to see whether the company opts for a sale or a public listing and how these decisions will shape its future in the competitive FX and CFDs market.

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