Courting, but open to offers

By DANIEL RIORDAN

The New Zealand Stock Exchange is considering a tie-up with a major international exchange if a contentious merger with its Australian counterpart falls through.

Speculation is mounting in sharebroking circles that official enthusiasm for the merger may be cooling.

Members unhappy at the prospect of a merger with the Australian exchange have advocated staying independent or bypassing Australia and forming an alliance with a world-leading exchange such as America's tech-rich Nasdaq.

One source claimed the Australians had baulked at the money the NZSE wanted for what in effect would be a takeover, while another said the bigger party was having second thoughts as the enormity of the administrative and enforcement gap between the two exchanges became apparent.

The same sources claimed the NZSE was now looking for a face-saving compromise as it backed away from the merger idea.

NZSE managing director Bill Foster said his directors' support for the merger was far from a done deal, and it would be several months before the exchange could take a proposal to its members - if at all.

"The board might conclude at the end of it all that we don't propose a merger and might propose something else."

Mr Foster said directors had undertaken not to consider proposals from other exchanges while talking to the ASX, but he declined to say what those proposals might be.

While acknowledging that some transtasman issues were proving hard to resolve, he said claims of cold feet in Australia were way off the mark.

"That's just talk coming from a segment of our membership and possibly some companies who see no advantage in the concept and possibly aren't interested in the details."

Mr Foster said discussions were taking longer than expected because the two parties were keen to work out complete details of any merger proposal before going to members.

"But we haven't formed a final view on the issue. It's like the common currency - there are advantages and disadvantages but they fall within different interest groups.

"Everyone has a personal interest in this and we're not out to polarise anyone."

He said merger opponents should hold their fire until they had something definite to aim at.