NZX sells Link Market Services stake for up to $14.3M, eyes NZClear; buys investment platform

Friday 26th June 2015

NZX, the stock market operator, has sold its 50 percent stake in shareholding registry Link Market Services for up to $14.3 million and signalled interest in buying the Reserve Bank's NZClear settlement system. Separately, the firm agreed to acquire investment platform Apteryx.

The Wellington based company sold its stake in Link NZ to join venture partner Link Market Services Australia for an initial payment of $13.8 million and up to $450,000 in earn-outs, it said in a statement. The transaction is effective form June 30. The investment had a carrying value of $2.9 million as at Dec. 31, according to NZX's annual report.

"NZX is committed to investing in and growing areas of the capital markets that are undeveloped and where we see value, with the benefits to both the market and our shareholders," chief executive Tim Bennett said. "The sale of our stake in Link NZ ensures NZX is now well positioned to take advantage of other opportunities to invest in the development of New Zealand's infrastructure, this potentially includes NZClear, which is currently being divested by the Reserve Bank of New Zealand."

This month the RBNZ sought expressions of interest in the security settlement and depositary business after deciding it wasn't part of the central bank's core business and needed significant investment or replacement.

The stock market operator also said it has agreed to buy investment platform Apteryx for an undisclosed sum, which isn't expected to have a material impact on earnings in the 2015 or 2016 financial years. Apteryx allows investment advisers and providers to manage, trade and administer client funds, and generated annual revenue of $1.2 million in the year ended March 31.

"The Apteryx platform that we are acquiring has the potential to be developed into a core industry utility with a goal of improving effectiveness and efficiency within the New Zealand market, while at the same time providing medium-term potential for our shareholders," Bennett said.

NZX has been expanding its footprint in funds management, buying SuperLife in December as part of a plan to roll out new exchange traded funds which it could then offer as a low cost KiwiSaver option.

The company's shares last traded at $1.07, and have declined 8.6 percent this year.

BusinessDesk.co.nz

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