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Nov 24, 2009 13:02 EEST
PODGORICA (Montenegro), November 24 (SeeNews) – Serbian-based diversified holding company Atlas Group plans to seek the merger of the two bourses currently operating on Montenegro's lightweight capital market after beefing up its stake in them last week, the head of Atlas Group-owned investment fund Atlas Mont said on Monday.
The pooling of the two stock exchanges will surely further the development of the local capital market while boosting turnover and liquidity, Atlas Mont Director General Djordje Djurdjic told SeeNews over the phone from his office in Podgorica.
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“It will probably also lead to the drafting in of a quality strategic partner for the merged entity,” Djurdjic said.
Atlas Group spans a total of 25 companies based in Serbia and Montenegro.
Last week, Atlas Mont and Atlas Group’s broking arm in Montenegro, CG Broker, bought 29% of Montenegro Stock Exchange and 21% of the NEX Montenegro bourse.
Following the deal, Atlas Group, together with its affiliate companies, controls 47% of Montenegro Stock Exchange and 38% of NEX Montenegro and is the single largest shareholder in either bourse, Djurdjic said. A merger move would require the backing of two thirds, or 66%, of the shareholders of each of the stock exchange operators.
“We hope that we will be able to secure the support of two thirds as we expect all the shareholders will realise the move would fit their interests,” he added.
“The merger could be completed very quickly,” Djurdjic said.
“I hope all could be completed in the next three to four months or even sooner, if there is a consensus.”
Djurdjic said the current state of affairs is not beneficial to any of the parties involved.
“A merger is the only way to highlight the quality of the Montenegrin capital market which has so far been largely overlooked."
The Zagreb Stock Exchange, Nordic stock exchange operator OMX and the Vienna bourse have been among the stock exchange operators that have previously indicated interest in entering the Montenegrin capital market.
Investors have so far been wary to follow through with their plans as there was no single bourse, no single address for them to call at, Djurdjic said.
He added there was still some investor interest but declined to provide more details.
“The talks are still in an initial phase so it would be inappropriate to name the investors. We also expect parties that had previously shown interest to also join in once they see it has come to a merger and the creation of a single bourse.
“It is still early to say how big a stake would be acquired by a strategic partner. Let’s first see the merger through and then proceed with such discussions. All options are open as far as this is concerned.”
A 1.0 million euro ($1.5 million) takeover bid for NEX pitched by Montenegro Stock Exchange failed in June 2008 as it was deemed too low, representing a premium of just 1.55% over the stocks' nominal value. NEX Montenegro's capital is divided into 1,984 shares with a nominal value of 511 euro each.
The Montenegro Stock Exchange (www.montenegroberza.com) is the older of the two bourses in the Adriatic country of some 620,000 people. It was established in 1993, while its peer NEX Montenegro was launched in 2001.
NEX Montenegro posted a turnover of 157 million euro in the first nine months of this year, while Montenegro Stock Exchange recorded 208 million euro in turnover through November 23.
The turnover on NEX Montenegro plunged to 83 million euro in 2008 from 453 million euro a year earlier. Montenegro Stock Exchange’s turnover slumped to 77 million euro last year from 275 million euro in 2007.
In addition to Atlas Mont and CG Broker, the other shareholders in NEX Montenegro are Atlasmont banka, Crnogorska Komercijalna Banka, Holder broker, KD Mont, Monte Adria broker and the Business Association of Brokers of Montenegro, according to data from the website (www.nexmontenegro.com) of the stock exchange operator. No data was immediately available on the size of their shareholdings.
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