Bucharest Stock Exchange takes steps for possible merger with Sibex bourse

Bucharest Stock Exchange takes steps for possible merger with Sibex bourse
By bne IntelliNews May 3, 2016

The Bucharest Stock Exchange (BVB) announced on April 29 it has taken the first step in a process that may lead to the absorption of the Sibex stock exchange.

The BVB shareholders approved at a general meeting on April 26 the start of negotiations with Sibex-Sibiu Stock Exchange for a potential merger. There have been previous talks on a possible merger, but they have not materialised.

The Bucharest bourse said it has sent invitations to several independent professional consultancy bodies, requesting expressions of interest and offers ‎for a due diligence study of Sibex and, potentially, for the evaluation that may constitute an indispensable element of a merger by absorption transaction, which may be envisaged in the future.

“This is a meaningful step, logically aligned with all efforts and projects that have been implemented by the Bucharest Stock Exchange, aiming at the removal of barriers impeding the development of the capital market in our country,” Lucian Anghel, president of the BVB board of governors, said.

Activity on Sibex has suffered a sharp drop in recent years. The exchange was also affected by the scandal around Cristian Sima, a broker who was part of its management between 2008 and 2012 and who reportedly lost several million euros belonging to investors through his brokerage firms, according to Ziarul Financiar. Sibex has accumulated losses amounting to RON11mn (€2.4mn) in recent years.

According to a previous note from BVB management to shareholders, quoted by Bursa.ro, the merger would bring more value to the Bucharest bourse thanks to an increase in its net assets and a better allocation of financial resources. In addition, the merger would lead to a potential consolidation of the BVB's position locally and regionally as only one entity would be involved in supporting Romanian companies and the economy.

However, during the shareholders meeting on April 26, there were some who opposed the merger. The president of the association of investors in Romania AIPC, Laviniu Dumitru Beze, said the acquisition did not represent an opportunity since Sibex did not have liquidity.

“Sibex is not a stock exchange, it’s a nonsense which does nothing and has gone bankrupt,” Beze said, according to Profit.ro. He added that the only rational option would be for Sibex to propose to sell its assets to BVB at a 50%-90% discount.

BVB runs markets for shares, bonds and other instruments, through regulated platforms and alternative systems, and provides a wide range of services to participants of financial markets. 

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