ACCC blocks Austock sale

ACCC opposes merger

By Wouter Klijn
Fri 26 Mar 2010

Austock's sale of its interest in Newreg has been blocked by the ACCC.

The Australian Competition and Consumer Commission (ACCC) has opposed the sale of securities registry service provider Newreg, in which Austock has a 16.7 per cent interest, to Link Market Services.

Austock will now miss out on $5.8 million in profit on the sale of its interest.

"Austock, along with the other shareholders of Newreg, are assessing their respective positions in light of the ACCC decision," Austock managing director and group chief executive Paul Masi said.

Masi joined Austock at the beginning of this month.

In February, Austock said it expected to sell its stake in Newreg for around $8 million. The company bought the stake via several transactions over 2007 and 2008.

The ACCC said the transaction would substantially lessen competition in the national market for securities registration and related services to listed companies.

"The proposed acquisition would remove one of a very small number of registry service providers, leaving the merged firm and Computershare as the two largest, with two very small competitors," ACCC chairman Graeme Samuel said.

"The proposed acquisition would significantly reduce the options available to a broad range of customers, in particular medium-sized companies and large companies with simpler shareholder registers."

Samuel also said there would be a real chance of muted competition developing between Link and Computershare after the merger. 

Austock has recently gone through a restructuring and the company has changed the line up of its board. Masi replaced Tim Boyle as chief executive.

The company reported an underlying loss of $900,000 for the six months to 31 December 2009.

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