Singapore tries to overcome resistance to ASX deal

[February 15, 2011]  SINGAPORE (AP) -- Singapore's stock exchange tried Tuesday to overcome resistance to its $8.3 billion takeover bid for the Australian stock market operator by promising equal representation for Australians on the board of the combined company.

ASX Ltd. and Singapore Exchange Ltd said in a statement that the new proposal calls for five Australian and five Singaporean directors in a 13-member board. That's two fewer total members than when the deal was announced Oct. 25 and increases the Australian representation from four. The remaining three would be independent directors.

The proposed takeover has met resistance from some Australian lawmakers. Opposition Liberal Party treasury spokesman Joe Hockey raised concerns last year that the takeover was not in Australia's national interest while Greens Party leader Bob Brown said he was swayed against the deal because of Singapore's human rights record.

The two parties command a majority in the Senate where they could block the deal which has yet to be approved by a range of regulators.

The attempt to make the takeover more attractive to Australia comes amid a global trend toward consolidation of exchanges. The London Stock Exchange said last week it planned to join forces with Toronto's TMX exchange while Germany's Deutsche Boerse and the NYSE/Euronext exchanges said they were in advanced talks about a business combination.

"The changes and commitments announced today, combined with existing regulatory protections, strengthen our belief that the ASX-SGX merger proposal is in the best interests of shareholders and in the national interest of Australia," ASX Chairman David Gonski said in the statement.

The Singapore and Australian exchange operators said they were committed to maintaining operations, assets and key staff in Australia and to invest in, develop and introduce new products and services in Australia and Singapore.

SGX said in October it was making a $8.3 billion cash and shares takeover offer for ASX to create the world's fifth-largest stock exchange operator by market value and the second-largest stock market in Asia by number of listed companies.

The deal aims to give both exchanges a better chance of prospering amid increased competition within Asia and as cross-border trading platforms like Chi-X Europe usurp the dominance of established stock exchanges.

[Associated Press; By ALEX KENNEDY]

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