Forum Archive Index - August 2000

["David Reid" <aspex@ix.net.nz>]

iX merger: Guinness Peat's Ron Brierley to oppose merger 'actively'  11 Aug 07:22

NEW YORK (AFX) - Guinness Peat (GPG), the finance group controlled by the New Zealand entrepreneur Sir Ron Brierley, has built up a stake in the London Stock Exchange and will campaign "actively" to stop its proposed merger with Deutsche Boerse AG, the FT.com reported, citing Sir Ron himself.

GPG has been an active buyer of LSE shares in the past three weeks and now owns 250,000 shares or just under 1 pct. Blake Nixon, GPG's director for the UK, said it has "an open mind" on increasing its stake.

According to the report, observers said other opponents of the deal could now emerge with stakes bought since the LSE's shares began trading on July 24.

"This could change the game (on the merger) somewhat, although it's too early to say yet," a banker familiar with the stock exchange was quoted as saying.

In a letter to the stock exchange, he argued that the "merger of equals" terms significantly undervalued the LSE.

He dismissed as "dross" an information memorandum issued last month by the two exchanges giving details of how iX would operate.

He called for the removal of shareholder restrictions and for a full listing for the LSE's shares. GPG would try to force the stock exchange to pay a special dividend of 10 stg a share "before any 'merger of equals' can be seriously contemplated".

"Unfortunately, it is painfully clear (that) LSE shareholders are getting the worst of the deal, by far," he said. "Needless to say, we will be voting against the merger (...) and, in the meantime, actively urging other shareholders to do likewise."

LSE chairman Don Cruickshank said Sir Ron's objections are not new and fail to take into account Deutsche Boerse's derivatives and technology divisions.

He also defended the information memorandum, which was "of prospectus standard".

"We have now completed around half our shareholder visit programme and have had constructive discussions with those we have met so far," Cruickshank said. David Reid