SFE sfe corporation limited

will be taken over by asx, page-4

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    re: will be taken over by asx + madmacs from SMH 090703
    Exchange imbalance

    Excited talk about a merger of the Australian Stock Exchange and the Sydney Futures Exchange seems to have died down.

    A Smith Barney report that talks up the blessings such a marriage would bestow on shareholders seems to have sparked the rumours, while a UBS missive along the same lines no doubt helped.

    Both brokers argue the merged entity would create "synergies" in the form of extra scale and cost savings.

    One point that seems to have been missed in all the excitement is UBS - a former SFE adviser - reckons a merger won't happen any time soon.

    According to UBS, the merger speculation "is without foundation" and "may relate to the departure of Allan Fels from the ACCC and a recent broker report [by Smith Barney] considering the potential cost savings".

    UBS believes the ASX is worried a merger would only be possible through "authorisation" under the Trade Practices Act, which "could lead to regulation by the competition commission".

    The broker also thinks the ASX is "not confident" such a transaction would lead to cost savings to justify any merger.

 
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