The Australian stock exchange operator, ASX, and the Singapore Exchange (SGX) have announced plans to join forces but the local bourse is happy to stay separate.If successful, the merged entity would have annual revenue of more than $US1 billion, and woul
The Australian stock exchange operator, ASX, and the Singapore Exchange (SGX) have announced plans to join forces but the local bourse is happy to stay separate.
If successful, the merged entity would have annual revenue of more than $US1 billion, and would be the Asia’s second biggest stock exchange after the Bombay, ahead of the Tokyo and Hong Kong stock exchanges.
NZX chief executive Mark Weldon has been reported as saying the New Zealand Exchange has no plans to become involved and had no fears of becoming isolated.
The merger plan involves SGX buying all the issued ordinary shares in ASX by way of a scheme of arrangement, with ASX shareholders being paid a combination of A$22.00 in cash and 3.473 new ordinary SGX shares for each existing ASX ordinary share.
Based on SGX's last traded price of S$9.54, this values ASX at S$10.7 billion (A$8.4 billion) or A$48.00 per ASX share. The offer represents a premium of 37.3% to the last traded price of ASX shares on 22 October 2010.
ASX and SGX said in a joint statement the merger would enable customers globally to capitalise on listing, trading, clearing and settlement opportunities created through the expanded platforms.
The combined ASX-SGX would have pro forma revenues of about US$1.1 billion and pro forma earnings before interest and income tax of about US$700 million, based on their financial results for the 2009/10 year.
The companies said in a joint statement that they would remain separate legal and locally regulated entities, and would maintain their existing brands.
The two said that listed companies would benefit from the increased profile of the combined listing platform.
Shareholders and court meetings will take place in the first half of 2011, with the proposed combination expected
to be implemented during the second quarter of 2011.
The transaction, which is subject to regulatory approvals, has the unanimous approval of the ASX and SGX boards.
Shares in ASX closed on Monday at $41.75, up $A6.79 from Friday’s closing level.
