ValueLine: ASX and Telstra
ASX used to be a wonderful business but is now expensive. Telstra is not as expensive, nor is it wonderful.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Eamon
:
potentially its better off merging with another exchange so to benefit from the synergy that way, also restricts compeitors from entry. Takeover may lead to over payment in goodwill, which arent great long term…. according to you!
Roger Montgomery
:
Hi Eamon,
You are right. Overpayment is a very real risk, but our discussion has been about the target rather than suitor.
Eamon
:
hmm, I actually never considered ASX being taken over. It wasnt to my knowledge that this could occur. Though the price would have to be much lower for potential buyer to feel convince its worth a takeover. Just wondering given the iliquidity in ASX as it gap trades most often would that pose as a deterant to potential buyer?
EAMON :)
Roger Montgomery
:
Liquidity is not an issue when announcing a takeover. It may be when trying to accumulate 19.9 percent quickly though.
Eamon
:
ASX is having problem at the moment, the decision from the governement to take is regulatory responsibility of it means less revenue, furthermore new entrants into this market in October this year ie; Chi-X has meant the company will potentially loss its monopoly status as a going concern. Investors has punish the share price to reflect this uncertainty, lets see how things unfold.
Eamon faithful.
Roger Montgomery
:
Hi Eamon,
Globally, you will discover that the removal of regulatory responsibility from an exchange has been followed shortly by a take over. Now, of course I am not suggesting that will happen here, but it is another line of thought you need to consider before being so convinced of your current line of argument.