* Eighty pct of OSE shares tendered in offer
* Tender result paves way for full merger in January 2013
By Nathan Layne
TOKYO, Aug 23 The Tokyo Stock Exchange said on
Thursday it acquired a two-thirds stake in the Osaka Securities
Exchange for $1.1 billion in a public tender, paving
the way for a full merger next year to create a dominant
equities bourse in Japan.
The Tokyo bourse (TSE) said in a statement that 80 percent
of all outstanding shares in the Osaka exchange (OSE) were
tendered in the offering, comfortably above the two-thirds limit
set by TSE for a total outlay of 86 billion yen ($1.1 billion).
The result ensures success for the TSE at the next stage of
the takeover process -- a meeting of OSE shareholders in the
coming months where an outright merger of the two bourses in
January 2013 must be approved by two-thirds of the vote.
The outcome had been clouded somewhat by the stance of some
overseas funds who believed the TSE should be paying a higher
premium than the per share tender offer price of 480,000 yen,
which values the entire OSE at 130 billion yen. OSE shares
closed at 437,500 yen on Thursday.
Fidelity, the OSE's top shareholder with a 15 percent stake,
had been leaning towards not tendering at that price, sources
with knowledge of the global fund giant's thinking had said
previously. Fidelity could not be immediately reached for
comment on Thursday.
OSE investors, which included a large number of hedge funds
who bought the stock after the deal was announced in November,
likely took into account the weak outlook for equity markets in
deciding to tender, said Jonathan Foster, Director, Global
Special Situations at Religare Capital Markets in Singapore.
"We've always believed the 480,000 yen cash offer and the
share-swap ratio for that matter don't fully reflect the value
of the merged company," said Foster, who has been advising funds
on how to deal with the tender offer.
"That said, I can completely understand why quite a number
of funds decided to play the short game and take the cash."
Unveiled in November, the merger has been billed as a way to
combine the strengths of the TSE in cash equities, a market
segment it dominates with more than 90 percent of volumes, and
the OSE's stronghold in Nikkei futures and other derivatives.
The combined value of stocks listed on the TSE and OSE, at
$3.5 trillion, would trail only NYSE Euronext (US) at
$13.2 trillion and Nasdaq OMX Group Inc's $4.5
trillion, figures for July from the World Federation of