The Board of NSX Limited (NSX) has recommended to their shareholders today that NZX acquires a 50.1% stake in the business.
This acquisition of a 50.1% stake in NSX is subject to NSX shareholder approval.
NZX's stake will be gained through issuance of 78,510,802 new shares at AUD $0.15 each, being 50.1% of NSX's total issued capital on a fully diluted basis, on the terms and conditions of an implementation agreement entered into between NZX and NSX. This represents a total consideration of approximately AUD $11.78 million.
NZX CEO Mark Weldon and NSX Chairman Michael Costello said, "The completion of the deal, if successful, will represent an important step forward for both organisations and for the capital markets on both sides of the Tasman."
Mark Weldon said, "NZX is well positioned to create a significantly improved earnings outlook for NSX, and to execute a growth strategy at a low marginal cost that will materially grow the value of NSX to the benefit of both NZX and NSX shareholders."
NSX listed on the ASX (ASX:NSX) in January 2005 and is regulated by the Australian Securities & Investments Commission (ASIC).
NSX shareholders will vote on the proposed issue of shares to NZX at the extraordinary general meeting on a date to be determined, likely to be in June 2009. Approval from 75% of NSX shareholders will be required to repeal a clause in the company's constitution that prevents a person from exercising voting power in more than 15% of NSX.
If the acquisition of a 50.1% stake in NSX is successful, NZX will appoint a majority of directors to the board of NSX.
The necessary documents have been lodged with ASIC for its approval for dispatch to shareholders.
NSX has established itself as the market for small to medium sized enterprises (SMEs) in Australia, providing an efficient mechanism to mobilise growth capital for these businesses. In the last five years, NSX has differentiated itself through targeting new products and market offerings for small, high growth businesses. Australia has five licensed exchanges; two of these licences are held by NSX - the National Stock Exchange of Australia and the Bendigo Stock Exchange.
NZX will update the market when further information is available.
If approved by NSX shareholders, the acquisition of a 50.1% stake in NSX by NZX would be funded by a mixture of equity and debt.