Zagreb Stock Exchange buys Ljubljana's bourse from Vienna

By bne IntelliNews July 17, 2015

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Zagreb Stock Exchange said on July 16 it has signed an agreement to take over 100% of the Ljubljana Stock Exchange (LJSE) from Austria's CEE Stock Exchange Group (CEESEG) for an undisclosed sum.

Upon approval by regulatory authorities of both countries and following a capital increase by the ZSE, the transaction is expected to be completed in the last quarter of this year, ZSE said in a statement.

Additionally, ZSE and the Vienna Stock Exchange (VSE) signed a letter of intent, forming a partnership aimed at sharing their trading technology. Subject to the successful completion of terms, VSE will provide ZSE with their trading system, interfaces, software and expertise.

VSE is part of the CEESEG and owner of LJSE. Apart from LJSE and VSE, CEESEG also comprises the stock exchanges of Budapest and Prague and is the largest stock exchange group in the region. It also operates three commodity exchanges and holds stakes in five clearing systems (CCPs) and two central securities depositories (CSDs).

“We expect the Ljubljana Stock Exchange takeover by the Zagreb Stock Exchange to yield positive effects for both exchanges and both capital markets, while also resulting in numerous synergies. We believe that the new consolidation context will be reflected positively on turnovers of both exchanges, in turn increasing their negotiating power with regard to the services they use and provide," Ivana Gazic, the president of ZSE management board said.

Gazic added that the Croat and Slovenian capital markets are very similar in terms of development, structure and potential, and investors in the two markets often consider them as one. Moreover, Croatian investors hold considerable participations in Slovenian companies.

The takeover has been previously announced by media which quoted unnamed sources close to the transaction. Slovenian daily Finance reported in April that ZSE was interested in LJSE because of the technology the latter was using - the Xetra trading system.

In April, Michael Buhl, the CEO of VSE, told Austrian daily Wirtschaftsblatt that  the company was planning to sell the Slovenian bourse and expected to evaluate offers by mid-year. 

In an interview with the Financial Times last month, Buhl commented on the fact that in Ljubljana VSE owned only the primary market but not the derivatives exchanges.

“We learnt a lesson [in Ljubljana] . . . if you don’t get the whole infrastructure in the country, it does not make sense,” he explained.

VSE acquired 81% of the Ljubljana bourse in 2008 and later raised its stake to 100%.

The turnover on ZSE increased 2.4% last year to HRK3.89bn (€512.5mn). Total market capitalisation in 2014 was 10% higher compared with the same period last year and amounted to HRK202.1bn.

The total turnover on the Ljubljana bourse stood at €686.3mn last year. The LJSE has a market capitalization of € 6.3bn.

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