Saturday July 21, 2012
SGX plays down merger talk
LONDON: The head of the Singapore Exchange (SGX) cast doubt on a press report his company was looking to buy the London Stock Exchange (LSE), telling the Financial Times he preferred to work with a broad range of exchanges.
Britain’s Daily Telegraph had reported the two were in talks about a potential £7.2bil (US$11.3bil) merger amid a flurry of tie-ups between global stock exchanges.
But SGX chief executive Magnus Boecker told the Financial Times he was “more focused on products and services and less on the M&A (merger and acquisition) side”.
The LSE and the SGX declined comment.
The two exchanges have worked closely together in a number of projects and last week announced an agreement that will involve them trading each other’s blue-chip shares.
Last year, they launched a joint bid to buy the London Metal Exchange, though they lost out to the Hong Kong Exchange last month.
LSE chief executive officer Xavier Rolet has held a series of informal talks with Boecker about a potential merger, the Telegraph said in a report on its website, without specifying where it got the information.
“Yes, we could do more with London but it’s not only London,” Boecker was quoted saying by the FT.
“Hopefully we can do more between London and SGX, like I can see us doing more with NYSE Euronext and (Deutsche Boerse derivatives arm) Eurex and Nasdaq,” Boecker was quoted saying.
Any form of formal offer was still some time away, the Daily Telegraph said, citing market rumours that suggest a takeover would be in the region of £13.50 per LSE Group share – a 32% premium to LSE’s Thursday close.
A deal combining the two bourses would be behind NYSE Euronext and Nasdaq OMX in terms of number of trades, but a takeover of Europe’s oldest independent bourse could run into stiff regulatory and political opposition.
While the structure of any potential merger is unclear, the Telegraph speculated that SGX would take over its British rival because of its larger market capitalisation.
“The two boards will be supercautious in considering any proposal given the history of failures,” said a source familiar with SGX’s thinking who was not authorised to speak to the media.
“It is not impossible, but the regulatory challenges will stand in the way of any deal.” — Reuters