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UPDATE 1-SGX-ASX deal can navigate political minefield: ASX

Published 12/05/2010, 09:44 PM
Updated 12/05/2010, 09:48 PM

* Access Economics report says deal in national interest

* Politicians need to focus on facts - ASX CEO

* Information to be lodged with FIRB in Dec/Jan (Adds detail, CEO quotes)

By Michael Smith

SYDNEY, Dec 6 (Reuters) - Australian stock-market operator ASX Ltd has shrugged off concerns that its $8 billion agreed takeover by the Singapore Exchange faces defeat, saying it could overcome political opposition to complete the deal on time.

The ASX ramped up its campaign on Monday to clear the deal with Australia's parliament, releasing a report from economic consultancy Access Economics which said the bid was in the country's national interest.

ASX shares were trading about 16 percent below the value of Singapore's offer on Monday, with investors still questioning whether the bourses can successfully navigate a string of regulatory and political hurdles.

ASX chief executive Robert Elstone voiced confidence the deal would survive Australia's "national interest" test for foreign investment approval, and said he was also unperturbed by scrutiny of the deal by Australia's competition watchdog.

But he said it would take until May or June 2011, at the earliest, to finalise the deal, sticking to his earlier timetable when the offer was announced in October.

The SGX and ASX, which run Asia's second and third largest stock markets respectively, will start making a series of information lodgments to Australia's Foreign Investment Review Board (FIRB) this month and in the first half of January.

"I anticipate that the earliest the transaction would complete would be around the May-June period of 2011. It will be a function of the length of time of the FIRB process and the parliamentary sitting period," he told reporters.

The deal would then need to go through a parliamentary approval process to change ownership restrictions followed by a shareholder approval process.

The controversial deal announced in October sparked an outcry from Australian politicians concerned about a foreign takeover of a major cog in the nation's financial system.

The Access Economics report, commissioned by the ASX, found the deal would improve Australia's chances of becoming an Asian financial hub and also the ability of Australians to diversify their savings, and cut the cost of capital for Australian firms.

Elstone said the Access Economics report would enable a more informed debate on the issue, saying that getting politicians' to focus on the important issues was the key challenge.

"Once they have that focus, I really don't see national interest as a stumbling block at all," he said.

The Australian Competition and Consumer Commission plans to release its ruling on the deal by Jan. 27.

ASX shares were trading 0.2 percent higher at A$38.01 mid-session, 16 percent below the offer value.

(Reporting by Michael Smith; Editing by Mark Bendeich)

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