BVLP – Bolsa de Valores de Lisboa e Porto – is to become the fourth European stock market to join the Euronext exchange, following the unanimous decision of shareholders to accept Euronext's merger offer.
Following the merger, BVLP shareholders will become shareholders of Euronext, and BVLP a wholly-owned subsidiary of Euronext, in a similar way to Euronext Paris, Euronext Amsterdam and Euronext Brussels. The portuguese stock market will be renamed Euronext Lisbon.
Upon full integration, Euronext and BVLP will provide users in Portugal with single trading, clearing and settlement platforms, offering enhanced liquidity, a central counterparty facilitating the netting of both cash and derivatives trades, and streamlined clearing and settlement, say the two exchanges.
Euronext’s cash trading platform based on NSC and its market model - both implemented in France in April 2001, in Belgium in May 2001 and in the Netherlands in October 2001 - will also be implemented in Portugal, so that all the members of Euronext will have access to all financial instruments traded on Euronext markets.
For the derivative trading platform, all Euronext derivative products are expected to be traded on the Liffe Connect system following a transitional period.
All cash and derivative trades will be cleared and guaranteed by Clearnet, Euronext’s clearing house and central counterparty, as it is already the case for all trades coming from Euronext Paris, Amsterdam and Brussels. The Clearing 21 system implemented in Paris will become the single platform for all Euronext markets.
Euronext and BVLP currently anticipate the simultaneous migration to the NSC and Clearing 21 platforms to be completed in the first quarter of 2003 and the simultaneous migration to the Liffe Connect platforms to be completed in the third quarter of 2003.
Manuel Alves Monteiro, chief executive officer of BVLP, comments: ”We believe BVLP’s merger into Euronext is the best means to achieve the goal we have all pursued: the creation of better conditions for the listed companies, the members and the investors operating on the Portuguese market.”
The merger offer was in respect of a total of six million BVLP shares, representing 100% of the issued share capital of BVLP. In aggregate, Euronext will issue 4.8 million new Euronext shares (equivalent to 4 per cent of the fully diluted and enlarged share capital of Euronext) and pay Eur35 million in cash for the entire share capital of BVLP.