March 22 (Bloomberg) -- Singapore Exchange Ltd.’s proposed takeover of ASX Ltd., operator of Australia’s main bourse, faces a new hurdle for approval after a senator in Canberra proposed today that the bid to be subjected to a parliamentary inquiry.
South Australian independent Senator Nick Xenophon’s motion for the Economics References Committee to examine the bid is due to be debated by the upper house Senate today, according to an order of business published on the national parliament’s website.
An inquiry would further delay the bid, submitted to Australia’s Foreign Investment Review Board on March 11, to create what the companies say will be the world’s fifth-largest listed exchange operator. It faces opposition from several Australian lawmakers who oppose Australian capital markets being run from Singapore.
“Hundreds of high level commerce jobs would disappear to Singapore if this takeover is approved,” opposition Nationals party Senator Barnaby Joyce said in a Canberra interview today as he joined in opposition to the bid. “This is not being parochial, it is a matter of survival for Australia’s commercial center of Sydney.”
The government is just going through the motions and will not approve the takeover even if the Foreign Investment Review Board says it can go ahead, according to a person with knowledge of the issue, who spoke to Bloomberg yesterday on the condition of anonymity because Singapore Exchange’s bid for ASX is still being reviewed by regulators.
‘Crazy to Approve’
Singapore Exchange, which runs the city’s securities and derivatives market, offered to buy ASX on Oct. 25 in a cash and share deal then valued at A$8.4 billion ($8.44 billion), a 42 percent premium to ASX’s share price, and worth A$7.5 billion at yesterday’s close of trading in Australia.
“We would be crazy to approve this,” Joyce said. “We would just see jobs disappear and any idea of Australia being a financial hub of Asia would go with it.”
The bid, which won approval from Australia’s competition regulator on Dec. 15, still requires the support of Treasurer Wayne Swan, the Reserve Bank of Australia, FIRB, the Australian Securities & Investments Commission and parliamentarians, several of whom have opposed the sale.
The minority Labor government led by Prime Minister Julia Gillard needs the support of four independent or Greens lawmakers to pass changes to the Corporations Act that are needed to allow the bid to proceed.
“The final decision maker here is the treasurer,” Swan told Australian Broadcasting Corp. radio yesterday. “I will take my decision based on the evidence before me, based not only on the recommendations of the Foreign Investment Review Board, but a thorough consideration of all these issues in good time.”
The Singapore bourse offered on Feb. 15 to give more board seats to Australians as a way of overcoming political opposition to the takeover on national-interest grounds.
To contact the reporter on this story: Gemma Daley in Canberra at email@example.com.