Concessions offered on ASX deal

The bid still requires the support of Treasurer Wayne Swan. Photo / Mark Mitchell

Singapore Exchange, pursuing a A$7.78 billion ($10.3 billion) takeover of ASX, offered to give more board seats to Australians as the companies battle to overcome opposition to the deal from lawmakers in Canberra.

The ASX-SGX board would include five Australian and five Singaporean citizens in its 13 members, ASX said yesterday. That compares with just four Australians on a board of 15 proposed when Singapore Exchange launched its bid in October.

The three international directors will be drawn from Singapore Exchange's current board, including chief executive Magnus Bocker.

Giving more board seats to Australians may reduce resistance from Canberra lawmakers who oppose the merger on national interest grounds. The concession comes as a proposed tie-up between Deutsche Boerse and NYSE Euronext, plus London Stock Exchange Group's acquisition of Canada's TMX Group, increase pressure on rival exchanges to expand.

ASX shares rose and Singapore Exchange fell after the statement.

"It's a step in the right direction that addresses some of the main issues and concerns and it certainly improves their chances of getting the deal through,"said Paul Xiradis, chief executive of Ausbil Dexia in Sydney.

"I'm not sure it's going to pacify or sway everyone."

Singapore Exchange also pledged to keep key staff in Australia and to invest in services - including an Australian dollar interest-rate-swaps clearing facility - in the country, according to ASX's statement on the restructure.

The bid, which won approval from Australia's competition regulator on December 15, still requires the support of Treasurer Wayne Swan, the Foreign Investment Review Board, the Reserve Bank of Australia, the Australian Securities & Investments Commission, and parliamentarians, several of whom have opposed the sale.

Chew Choon Seng, current chairman of Singapore Exchange, will be chairman of the combined group and David Gonski, now ASX chairman, will be the merged company's deputy chairman. Bocker, who will be managing director and CEO, said the latest proposal was "a merger of equals".

"It doesn't feel like that," said Chris Hall, at Argo Investment in Adelaide.

- BLOOMBERG