ASX Announces Revised $260 million SFE Merger Proposal

Key Points: ASX boosts offer price for SFE by $50 million; Revised purchase price is $260 million, including surplus SFE cash of $70 million; The offer comprises $210 million in cash plus 5 million ASX shares; Merger remains subject to approvals, including by SFE members and the ACCC; Compared with the original proposal, ASX's revised offer proposes an increased proportional entitlement to Local, Associate and Temporary-local members of SFE, as well as an increased overall quantum; The revised proposal is initiated by ASX . The earlier proposal responded to an SFE approach at a price proposed by SFE. The Board of Directors of the Australian Stock Exchange is pleased to announce a significant revision and enhancement of its proposal for the merger of ASX and the Sydney Futures Exchange Limited ("SFE"). ASX has increased its price by $50 million to $260 million (inlcuding SFE surplus cash). This offer comprises $210 million in cash and 5 million ASX shares. ASX believes that a merger of SFE and ASX is in the best interest of SFE members and Australia's financial markets generally. This view has been confirmed during recent consultations with all member classes of SFE. "These discussions have enabled us to prepare a revised proposal that is not only immediately financially attractive to SFE members, but helps strengthen the future of their businesses by developing a strong, integrated market in equities, futures and other derivatives." said ASX Managing Director, Mr Richard Humphry. "ASX believes this merger proposal is not only in the best interests of SFE and its members, it also makes competitive sense for Australia to have one clear strategy for a globally competitive exchange." "We are offering a clear and attainable vision for the future of Australia's financial markets." Mr Humphry said ASX's recent consultations with SFE members had revealed a genuine belief among them that a co-ordinated approach to the growth of Australia's capital marketplace was far better than an approach which might fragment the market. "Merging of ASX and SFE has always been the natural and logical next step in the maturing of Australia's financial markets, but the rapid consolidation in the financial service sector around the world has given added impetus to the merger of our two exchanges," he added. "While both our exchanges are relatively small by world standards, a combined entity strengthens our joint position in dealing with the challenges of competition from foreign markets."