Accc Backs Takeover As Registries War Hots Up
The Age
Tuesday July 24, 2001
SYDNEY
The two-way battle for the share registry business of Australia's largest companies stepped up a notch yesterday when it was revealed that Computershare would seek to buy much smaller loss-making rival BT Registries.
The deal, which is yet to be signed but which was yesterday given the blessing of the Australian Competition and Consumer Commission, would give Computershare another 6.5 per cent of the Australian share registry market and ownership of the number three player.
The mooted deal also adds to the pressure on Computershare's main rival, ASX Perpetual Registrars, which is building a ``bureau services" system to replace that previously provided by Computershare.
The ACCC's blessing comes just a week after Computershare and Perpetual settled their long-running litigation, in which Computershare alleged that Perpetual had provided confidential information to its new registries joint-venture partner, the Australian Stock Exchange. The parties agreed to a smooth transition that would see ASX Perpetual adopt its own system by the end of the year, meaning that both would compete head-on and independently of each other's systems.
``It was pleasing to us the case was settled," said ACCC commissioner Ross Jones. ``We certainly did not rush this because we were hoping the case would be resolved so we had a clearer understanding of what was happening. It was suggested there was a risk that Computershare might just pull the plug and prevent ASX Perpetual from doing anything for some months and there was concern you might be in this complicated position."
Computershare controls more than half the market, but ASX Perpetual also has a large share of the market, counting NRMA, Telstra and Commonwealth Bank as clients. Registry services include the mailing of dividend cheques and other information to shareholders.
While BT Registries, a division of BT Funds Management, reportedly was losing market share and $7million a year, it counts WMC, CSR, Goodman Fielder and Brambles among its clients and holds a dominant share of the fixed-interest registry market. BT had wanted to be a player in administrative financial services businesses such as registries, but the owner of BT Funds Management since 1999, Principal, did not believe the business had the scale to compete effectively.
Computershare managing director Chris Morris declined to comment.
Computershare fell three cents to $5.99 even though the acquisition may allow it to replace lost revenue from the ending of the bureau services deal with Perpetual. Perpetual rose 37 cents to $42.57.
The bitterness between Computershare and ASX Perpetual Registrars may at least provide some solace to the ACCC over any possibility of collusion if the market is dominated by only two players. ``It's nice to think that they get on so poorly because that bodes well for the future," said Mr Jones.
© 2001 The Age