The co-operation will be based on HEX's offer to acquire over 50 % ownership in TSE, which will be achieved by purchases of existing shares as well as subscription of new shares in a directed offering. The directed issue will be decided at the Annual General Meeting (AGM) of TSE to be held on March 21, 2001. The TSE Supervisory Board has welcomed the cooperation plan among TSE, its shareholders and HEX, approved of the transactions needed to achieve HEX's majority ownership and recommended that the shareholders accept HEX's offer. A prerequisite for the arrangement is that acceptance is acquired from relevant authorities.
Operationally HEX offers TSE a trading system under a facilities management (FM) arrangement, thereby extending HEX's network to Estonia. Creating a much larger home market will increase turnover and significantly enhance liquidity. International investors will gain easy access to Estonian securities.
As before, trading will be regulated by Estonian laws and clearing and settlement will take place at the Estonian Central Depository for Securities (ECDS), a subsidiary of TSE. Likewise, market activity will be supervised by TSE. In order to facilitate cross border clearing, preparations will begin for a link co-operation between ECDS and the Finnish Central Securities Depository, a subsidiary of HEX.
HEX supports a strong Estonian ownership in TSE also in the future and wants to develop the Estonian equity markets in co-operation with local participants. The ownership arrangements will be finalised as soon as possible after the share purchases and directed share issue have been concluded. Trading with Estonian securities in the HEX trading system will commence in the course of the year 2001.
"HEX sees that this initiative clearly supports our growth strategy by expanding HEX operations to tomorrow's growth markets. The similarity in corporate structures of the two groups is likely to give synergies in operations as well as possibilities to share development efforts. HEX's Finnish and international members comprise an extensive trading network, that will expand the group of investors with direct access to Estonian markets. This arrangement is globally unique in the marketplace industry and we should all be very proud of the achievement " stated Mr Jukka Ruuska, president and CEO of HEX. "HEX is willing to advance the capital markets of the whole Baltic region", he adds.
"Integrating the Estonian securities market into international structures is a major strategic priority for the Tallinn Stock Exchange. We believe that this would mean much easier access for investors and better visibility for local companies, therefore enhancing the liquidity and attractiveness of the Estonian capital market. We are hopeful that an arrangement can be reached with HEX that would be positive for all market participants and stakeholders. The co-operation with HEX would necessitate an end to TSE's talks with the Norex Alliance," stated Gert Tiivas, CEO of TSE.
