The Singapore Exchange (SGX) is preparing a formal offer to purchase London's Baltic Exchange, after the parties entered exclusive talks on the acquisition in May, Reuters cited sources close to the matter.

The sources added that both parties reached key milestones related to the acquisition.

Following discussion with a number of interested bidders, which included CME Group (CME.O), ICE (ICE.N) and Platts, the Baltic Exchange and SGX signed the exclusivity agreement.

London's exchange earlier said that SGX's proposal was "attractive" and that it "has the potential to enhance significantly the position of the Baltic, serving the needs of Baltic members, shareholders and other stakeholders."

The exclusive talks were extended until Aug. 31.

At the end of July, the Baltic Exchange sent an agreement, which documents and reinforces existing processes established by the exchange and the panellists, to each of its 48 shipbroking panellists for signature.

The proposed agreement, sent in relation with the potential acquisition by SGX, formalises the relationship between the Baltic Exchange and its panellists which has been developed over more than 30 years.