Taking sides in secret as merger talks continue

Friday 19th January 2001

NO STONE UNTURNED: Simon Allen says he is investigating all options

By Nicholas Bryant

So who wants a stock exchange merger, or perhaps more importantly, who doesn't?

The issue is so sensitive some brokers have been told to keep their opinions to themselves by the firms they represent.

"Such caution surrounds any merger and acquisition negotiations," an NZSE adviser said pointedly.

But the reality is the NZSE brings to the ample Australian table a good computer system for trading shares cheaply and a negligible brand.

But NZSE chairman Simon Allen said there were exhaustive complexities in investigating this deal and he intended to leave no stone unturned.

No sharebroking firm is willing to be labelled entirely anti-merger and insiders will give only an indication of the position of individuals.

Most of South Island retail specialist Greenslades is said to be against, while its near neighbour Forsyth Barr, rapidly growing in importance thanks to its own merger activity, is understood to be about 75% against.

Of the big guns, Credit Suisse First Boston has a number against, while the same can be said for Ord Minnett and recently established Macquarie Bank, headed by one of the few openly anti-merger campaigners, Ian Waddell.

DF Mainland has some nay sayers, while even some big names in Mr Allen's ABN Amro are understood to be deeply opposed to a merged Australasian exchange.

Mr Waddell has been quoted as saying 90% of people he has contacted are against, while sources close to the NZSE say it's running about 50-50, not enough for the pro-merger camp in a vote.

Mr Allen said such numbers were pointless before a strict proposal was put to members.

It seems unlikely there will be any battle over who gets what when the exchange is demutualised.

The preferred option is for each member to get one slice of the pie if the NZSE is demutualised, rather than apportioning slices according to numbers of trades.

Despite recent broking house mergers there has been no reduction in membership numbers of the NZSE, with merged firms keeping their votes.

There are 274 individual members of the NZSE and 40 member firms.

The 40 member firms are identified in the back of the Stock Exchange's annual report.

Not so the 274 individual members. The exchange is adamant their identity be kept secret, a timely reminder of why critics are calling for change.

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