Sydney Futures Exchange Agrees To Exclusive Deal With Computershare

The Board of the Sydney Futures Exchange (SFE) today announced it would deal exclusively with Computershare Limited (CPU) after receiving a revised offer that values SFE at $260 million. The Chairman, Mr Rick Holliday-Smith, confirmed that "both parties had continued discussions since early June and had now agreed to a firm proposal after a series of negotiations." Mr Holliday-Smith said: "SFE will have no further discussions with ASX or any other merger partner and will put CPU's revised proposal to SFE Members as soon as possible." Both SFE and CPU have agreed to sign an Implementation Agreement no later than 7 October 1999. The CPU offer would then be the only merger, ownership or demutualisation proposal put to SFE Members and SFE will not pursue any proposal to demutualise on its own. "The SFE Board unanimously considers that CPU's offer is in the best interests of all classes of SFE Members who should now be allowed to consider it on its merits", Mr Holliday-Smith said. "The Board has reviewed the benefits it believes CPU can offer SFE, in particular its technology, and is satisfied they will generate substantial value for SFE Members. For this purpose, SFE will continue to investigate the suitability of replacing SFE's existing technology systems with CPU's technology systems. Any CPU systems will be provided to SFE at no initial licence fee." As part of its revised offer, CPU has agreed to increase the cash component to $130 million, so that the increased offer values SFE at $260 million, including the estimated $70 million in surplus cash on SFE's balance sheet. As previously, CPU will acquire 50% of a demutualised SFE with SFE Members holding the balance. Mr Holliday-Smith said: "The SFE Board looks forward to consulting with Members about the process of demutualisation and working closely with CPU to explain the merits of its revised offer." The Chief Executive of SFE, Mr Les Hosking, said: "CPU will bring a range of strategic benefits and relationships to SFE, and both CPU and SFE Members should benefit from the future development of SFE's businesses and the new initiatives under consideration." Mr Hosking also said: "Under the agreement, SFE will remain free to enter into strategic alliances with the consent of CPU. "The revised CPU proposal will be formally put to SFE Members and a vote is expected to take place late this year in line with legal requirements and the demutualisation of SFE." To the extent that certain SFE Members request liquidity for their interest in a demutualised SFE, SFE is expecting to put in place appropriate arrangements to provide liquidity as required.