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I have not Blogged on this transaction although you may have read or seen quotations from me from the media.
Details of the SGX takeover of ASX can be found here.....a summary of the key terms are as follows:
a) SGX is offering to acquire all the shares of ASX for A$22.00 in cash and 3.473 new SGX shares
b) the transation is subject to a whole series of regulatory and shareholder approvals with completion targetted for sometime in Q2-2011
c) based on last Friday's closing prices for both shares, the SGX offer was at a huge premium of between 37% to 47% depending on which period the reference price was based on.
d) the consideration was S$10.7bn or about 104% of the market capitalisation of the SGX; 608.25mn new SGX shares would be issued; and the net gearing of SGX would rise to 44.9% on completion
The price of the SGX shares which stood a S$10.12 on 15 October 2010 fell by 13.8% to a post announcement low of S$8.72 on October 26, 2010. ASX shares initially rebounded to reflect the offer but has since seen its shares decline inline with the weakness in the SGX share price.
My personal view on the proposed transaction is as follows:
a) strategically it makes sense for the SGX and ASX to come together. The combined entity and market would then be a credible alternative to North Asia and if successful - it could eventually attract other smaller capital markets in South East Asia to join as well.
b) I was surprised by the structure ie cash and shares which would give the SGX's original shareholders control of the enlarged entity. An all share deal or a merger of equals would have been my preferred route - it would be politically more acceptable to both sides and would not leave the combined entity with so much debt.
c) i also recall difficulties that Singapore and Chinese companies have had in the past in trying to acquire strategic Australian assets. Read more...[caption id="attachment_3568" align="alignright" width="150" caption="Photo by Jule_Berlin"][/caption]
I have not Blogged on this transaction although you may have read or seen quotations from me from the media.
Details of the SGX takeover of ASX can be found here.....a summary of the key terms are as follows:
a) SGX is offering to acquire all the shares of ASX for A$22.00 in cash and 3.473 new SGX shares
b) the transation is subject to a whole series of regulatory and shareholder approvals with completion targetted for sometime in Q2-2011
c) based on last Friday's closing prices for both shares, the SGX offer was at a huge premium of between 37% to 47% depending on which period the reference price was based on.
d) the consideration was S$10.7bn or about 104% of the market capitalisation of the SGX; 608.25mn new SGX shares would be issued; and the net gearing of SGX would rise to 44.9% on completion
The price of the SGX shares which stood a S$10.12 on 15 October 2010 fell by 13.8% to a post announcement low of S$8.72 on October 26, 2010. ASX shares initially rebounded to reflect the offer but has since seen its shares decline inline with the weakness in the SGX share price.
My personal view on the proposed transaction is as follows:
a) strategically it makes sense for the SGX and ASX to come together. The combined entity and market would then be a credible alternative to North Asia and if successful - it could eventually attract other smaller capital markets in South East Asia to join as well.
b) I was surprised by the structure ie cash and shares which would give the SGX's original shareholders control of the enlarged entity. An all share deal or a merger of equals would have been my preferred route - it would be politically more acceptable to both sides and would not leave the combined entity with so much debt.
c) i also recall difficulties that Singapore and Chinese companies have had in the past in trying to acquire strategic Australian assets. Read more...
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I have not Blogged on this transaction although you may have read or seen quotations from me from the media.
Details of the SGX takeover of ASX can be found here.....a summary of the key terms are as follows:
a) SGX is offering to acquire all the shares of ASX for A$22.00 in cash and 3.473 new SGX shares
b) the transation is subject to a whole series of regulatory and shareholder approvals with completion targetted for sometime in Q2-2011
c) based on last Friday's closing prices for both shares, the SGX offer was at a huge premium of between 37% to 47% depending on which period the reference price was based on.
d) the consideration was S$10.7bn or about 104% of the market capitalisation of the SGX; 608.25mn new SGX shares would be issued; and the net gearing of SGX would rise to 44.9% on completion
The price of the SGX shares which stood a S$10.12 on 15 October 2010 fell by 13.8% to a post announcement low of S$8.72 on October 26, 2010. ASX shares initially rebounded to reflect the offer but has since seen its shares decline inline with the weakness in the SGX share price.
My personal view on the proposed transaction is as follows:
a) strategically it makes sense for the SGX and ASX to come together. The combined entity and market would then be a credible alternative to North Asia and if successful - it could eventually attract other smaller capital markets in South East Asia to join as well.
b) I was surprised by the structure ie cash and shares which would give the SGX's original shareholders control of the enlarged entity. An all share deal or a merger of equals would have been my preferred route - it would be politically more acceptable to both sides and would not leave the combined entity with so much debt.
c) i also recall difficulties that Singapore and Chinese companies have had in the past in trying to acquire strategic Australian assets. Read more...
