Australia rejects Singapore exchange takeover bid

AP News
Posted: Apr 05, 2011 7:47 AM
Australia rejects Singapore exchange takeover bid

Australia signaled Tuesday that it would block the Singapore stock exchange's $8.3 billion takeover bid for the Australian bourse, saying the deal is not in the national interest.

Treasurer Wayne Swan, who has veto powers on major foreign investments in Australia, said the Foreign Investment Review Board had informed the SGX, operator of the Singapore exchange, that he was inclined to reject the deal.

"FIRB informed SGX that I had serious concerns about the proposal and that, subject to further consideration, I intended to accept the unanimous FIRB advice that the takeover would not be in the national interest," Swan said in a statement.

SGX made a $8.3 billion cash and shares takeover offer for ASX in October in a bid to become one of Asia's leading stock markets. The two companies hoped the deal would help them compete as bigger global exchanges join forces.

Nasdaq OMX Group Inc. and another U.S.-based market, the IntercontinentalExchange Inc., have made a joint $11.3 billion bid for NYSE Euronext, the parent company of the New York Stock Exchange. That raises the possibility of a bidding war with Deutsche Boerse, which agreed a $10 billion deal with NYSE in February. London Stock Exchange Group Plc, meanwhile, plans to purchase Canada's exchange operator TMX Group Inc.

Swan said he had not made a final decision on the SGX deal.

SGX chief executive Magnus Bocker said the FIRB hadn't requested any changes to the proposed takeover, and he expects a final decision "within days."

"We're surprised," Bocker said on a conference call with reporters and analysts. "As a combined entity, ASX and SGX would have been the best place to leverage Asia's growth."

SGX said it will continue to pursue other growth opportunities including further talks with ASX on other forms of cooperation.

ASX said in statement the company's board still believes it should participate in "regional and global exchange consolidation" and would continue to evaluate strategic growth opportunities, including other forms of cooperation with SGX.