Nordic exchange operator OMX has signed a letter of intent to merge operations with the Copenhagen Stock Exchange (CSE), bringing an integrated Nordic and Baltic securities market a step closer.
Under the deal, OMX will acquire all outstanding CSE shares, which it says have a total value of Dkr1,220 million, including net cash of DKr258 million as of September 30 2004. Under the proposed terms, CSE's shareholders will be entitled to choose between a cash consideration and newly issued shares in OMX, or a combination.
The letter of intent will result in a formal combination agreement to be announced in December and an offer will subsequently be submitted to CSE shareholders.
OMX says the merger is expected to create annual pre-tax cost savings of around Dkr25 million to have full effect within three years, but with the major part having effect within two years. Restructuring costs are estimated at around Dkr50 million pre-tax.
Under the deal, CSE operations will be combined with OMX Exchanges. Following the merger, Hans-Ole Jochumsen, president and CEO of CSE, shall become deputy head of OMX Exchanges.
OMX says the move is supported by several of the largest CSE shareholders, including Danske Bank, Nordea, Sydbank, Amagerbanken, Alfred Berg, Nykredit, RealDanmark, BRFkredit and TDC, which together represent more than 50% of the outstanding shares of CSE.
CSE and OMX have urged the other Nordic exchanges - Oslo Børs and Iceland Stock Exchange - to join the combined entity.