Ten years ago, after OM Gruppen failed in its bid for the London Stock Exchange, defeated executives held a celebratory dinner for advisers: vodka, Viking helmets, the works. The lack of success mattered less than the statement of intent that put the tiny Stockholm-based exchange operator firmly on the map. Over the next few years it acquired exchanges in Finland, Lithuania, Denmark and Armenia, and in 2008 sold out to Nasdaq at a very high price.
Magnus Böcker may be up to something similar now. In 2000, he ran OM’s software division; now he is head of SGX, the Singaporean exchange group bidding for ASX of Australia. Sadly, but predictably, his $8.4bn offer met with a cool reception in Canberra, where removal of the current 15 per cent cap on ownership in ASX by a single shareholder requires parliamentary approval. The coalition government may not want to spend political capital drumming up support for this particular example of globalisation. That is certainly investors’ assumption as ASX shares are trading a fifth below the offer price.
If the offer is rejected, it would not be a disaster for SGX. The promised cost synergies are a negligible $30m and the 37 per cent premium looks generous. And it is not clear that SGX’s management has what it takes to make the combined entity grow organically. Its own initiatives – such as the trading of 19 American Depositary Receipts of Asian companies – have struggled.