(Adds fresh comments)
SYDNEY, April 5 (Reuters) - The Australian government said on Tuesday it was inclined to reject the Singapore Exchange Ltd's proposed $7.8 billion takeover bid for Australian stock-exchange operator ASX on national interest grounds.
COMMENTARY:
BARNABY JOYCE, OPPOSITION NATIONALS SENATE LEADER
"The reality is that the Australian stock exchange being run from Singapore was never going to be a great outcome for Australia. The silence has been deafening from those who have been advocating politically for the ASX to go to Singapore.
"If the Australia Stock Exchange had gone to Singapore, then a large section of the commerce of Sydney was superfluous to requirements and those jobs would have gone to Singapore."
BOB BROWN, GREENS PARTY LEADER
"If they restructure the deal, we'll look at it. But so what, it will still be controlled from Singapore regardless."
DANIEL GOLDBERG, SPECIALIST M&A LAWYER, ADDISONS
"It's a very unusual decision -- an outright rejection is very rare, there aren't many of them. It's very surprising that they didn't take the full time they could have to make this decision."
SENG CHOON LENG, HEAD OF RESEARCH AT DMG & PARTNERS
"In the short term, this should lend some strength to SGX's share price as the majority of the market players feel that if the deal doesn't go through, it's better for SGX. They were concerned that the price SGX was paying for ASX was too hefty. If the deal really falls through, they could look for other areas of growth, for example, attracting more foreign listings."
ANDREW MARTIN, PORTFOLIO MANAGER, ALPHINITY INVESTMENT MANAGEMENT
"I'm not that surprised, given what we'd heard in the market. The general view was it was going to be hard to get over the line. Whether it's with SGX or someone else, ASX will keep trying to do something, given what's going on with their peers offshore...A straight-out takeover's probably not going to happen. If Singapore's not allowed, why would someone else be allowed to?"
ANGUS GLUSKIE, PORTFOLIO MANAGER, WHITE FUNDS MANAGEMENT
"It is not completely surprising but in light of the consolidation we are seeing in the world of exchanges this kind of decision is surprising. I think the exchanges themselves will still see consolidation as being an absolute must for them."
SHANE DELPHINE, FUND MANAGER, KARARA CAPITAL
"Clearly the political dynamics were becoming challenging for the deal and as time passed it looked unlikely. The latest move is a clear signal if a deal needs to be done, then ASX and SGX will have to radically change the terms of the deal. A merger of equals will pass. ASX might also talk to other exchanges like HKEX."
"I never thought the logic of consolidation was as compelling for the ASX like some of its peers in America or Europe. I believe for quite some time the ASX can stand alone successfully."
MARK DANIELS, HEAD OF EQUITIES, ABERDEEN ASSET MANAGEMENT
(Aberdeen owns ASX shares)
"Everybody else across the world seems open to it (exchange consolidation) except Australia. I don't know why it should be rejected on national interest. ASX and SGX will certainly be disappointed...Having said that, the ASX is a very well run company, that is the consolation here."
JASON BEDDOW, CHIEF EXECUTIVE, ARGO INVESTMENTS
"It's not such a surprise really. Governments are getting pretty tough on lots of things. I wouldn't say governments are particularly business-friendly at the moment.
"As this (review of the merger) has gone on longer, most people were of the view it was getting pretty hard."
JOHN SEVIOR, HEAD OF AUSTRALIAN EQUITIES, PERPETUAL INVESTMENTS
"The duty of the board is to maximise the interests of all shareholders. I don't think that changes as a result of this statement. That's what they're there to do. I'm disappointed but not surprised."
MARKET REACTION
Shares in ASX fell after Treasurer Wayne Swan said he had intended to block the deal. The stock ended down 3.3 percent at A$33.70 after dipping as low as 33.35. Meanwhile SGX shares were up 4.6 percent at S$8.39.
BACKGROUND
* SGX's bid for ASX, first announced in October, was under pressure from Australian politicians because it was seen as ceding control over a key national institution and a de-facto monopoly.
* Investors had deemed the deal likely to fail in its
current form, but said consolidation was still inevitable. The
global finance industry is being transformed by a wave of
mergers that includes a proposed tie-up between NYSE Euronext
and Deutsche Boerse
* Political opposition comes despite the SGX bowing to pressure and agreeing to give ASX an equal number of directors in a merged group. Last month, the Sydney Morning Herald quoted a senior government source as saying that if the Foreign Investment Review Board did not stop the deal, the Treasury certainly would.
* The SGX was offering 3.473 SGX shares plus A$22 for each ASX share.
(Reporting by Sydney, Melbourne, Canberra and Singapore bureaux)