Bourses sign merger pact

Bourses sign merger pact

JAKARTA (JP): PT Bursa Efek Surabaya, the manager of the
Surabaya Stock Exchange (SSE), signed a merger agreement on
Saturday with PT Bursa Paralel Indonesia (BPI), the manager of
the Jakarta-based parallel market, after five months of intensive
negotiations.

Under the agreement, the SSE will take over the assets and
operations of the BPI, which manages the over-the-counter market
of small and medium-scale companies and manages odd lot (less
than 500 stocks) stock trading.

The BPI itself will be liquidated at an extraordinary
shareholders' meeting next week.

"But this deal is not an acquisition in the real sense because
of the cross shareholdings of the two exchange-managing
companies," SSE president Basjirudin A. Sarida noted after the
signing of the agreement.

Basjirudin added that the SSE would continue to operate under
its old name and that its management would be maintained.

He said the SSE would conduct odd lot transactions and operate
the over-the-counter bourse in Jakarta in addition to its
ordinary stock transactions in Surabaya.

The SSE was initially favored by the government's double
listing policy which required share issuers to list their shares
both on the Jakarta Stock Exchange (JSX) and on the SSE. But the
policy was abolished following the privatization of JSX in 1992.

BPI president Tito Sulistio also declined to call the deal an
acquisition. "This is a merger, because the BPI's shareholders
also become the SSE's shareholders," he said.(04)