ASEAN KEY DESTINATIONS
New deal proposed for exchange merger
The Singapore Exchange (SGX) and it's the Australian Exchange (SGX)have altered the terms of their proposed buyout in a bid to deflect the political flak the deal is catching Down Under.
The altered terms give Australians more say at board level and address claims that the buyout would end up driving some of the country's key financial operations and talent to Singapore.
Tuesday's revamped proposal is aimed at making the $8.3 billion merger more palatable for regulators and politicians in Australia, where strong resistance has emerged.
Reaction was mixed Tuesday. ASX's shares went up sharply, but the SGX counter went the opposite way.
Analysts are generally positive and feel the deal has more hope of success with these changes, but maverick Queensland MP Bob Katter remains dead-set against it and in a tight Parliament, he could make all the difference.
One key change announced by the bourse operators in a joint statement yesterday concerns the composition of the board.
Initially there were to be 15 directors, but only four would be from ASX, with three "internationals" to come from the SGX's current board, including chief executive Magnus Bocker, a Swede. The remaining directors would be Singaporeans.
The proposed new board will now comprise 13 directors, five each from Australia and Singapore, plus the three internationals.
Yesterday's statement confirmed that SGX chairman Chew Choon Seng will chair the combined group, while ASX chairman David Gonski will be deputy chairman.
Other moves to strengthen the proposal included commitments to keep ASX's operations, assets and key staff in Australia. There were also pledges to invest in and develop new products and services in both countries. For example, the top 200 stocks will be able to join SGX or ASX more easily. Products will also be listed on both exchanges.
SGX's Bocker said in a conference call that the changes were made based on feedback that SGX and ASX had received from more than 300 meetings held with politicians, regulators, shareholders, investors and listed companies since the merger deal was announced in October.
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