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Creation of a strong integrated Nordic and Baltic securities
market
November 15, 2004
Today’s agenda
• Welcome and introduction Hans-Ole JochumsenPresident & CEO, CSE
• The OMX perspective Magnus BöckerPresident & CEO, OMX
• The CSE perspective Hans Ejvind HansenChairman of Board of Directors,
CSE• Transaction overview and Jukka Ruuska
future governance President OMX Exchanges
• Danish marketplace perspectives Hans-Ole Jochumsenand timing President & CEO, CSE
• Q & A’s
OMX in brief
• Operations in 13 countries, 1 460 employees
• Exchange operations in Sweden, Finland, Estonia, Latvia and Lithuania– 500 listed companies
– 124 members
• More than 100 global technology customers
• Revenue Jan-Sept 2004 SEK 2,319 m
• Operating income Jan-Sept 2004 SEK 541 m
• Listed on the exchanges in Stockholm and Helsinki
Merger rationale
• To create values and benefits for customers and shareholders
• Natural step in OMX’s strategy of an integrated Nordic Baltic securities market
• Enhance strategic position
Oslo Börs
OMX Exchangesincl. CSE
SWX
Borsa Italiana
Spanish Exchanges
Deutsche Börse
Euronext
London SE
793
625
545
529
86
1,043
1,675
3,448
0 1.000 2.000 3.000 4.000
European stock exchangesValue of cash equity trading, Jan-Oct 2004, EURbn
Source: FESE
otob market.at (Austria)
WSE (Poland)
Oslo Börs
ADEX (Greece)
Borsa Italiana
Spanish Exchanges
Eurex*
Euronext
416
405
77
19
15
4
4
3
2
0 100 200 300 400 500
OMX Exchanges*incl. CSE
European derivatives exchangesEquity derivatives trading volume, Jan-Oct 2004
*Finnish options traded at Eurex are included in the statistics of OMX Exchanges Million contracts
A higher degree of infrastructural integration and transaction efficiency will be required
Market trends
• Structural growth in trading equities and derivatives
• Consolidation and implementation of Nordic strategies among
market participants
• Increased demand for on-exchange trading and central clearing
services
• Increased competition among exchanges
End user costsIndexed
Turnover velocityPercent
Increased efficiency = higher liquidity
0 25 50 75 100 125 150
10
20
30
40
50
60
Source: FIBV, Elkins McSherry, McKinsey
One trading platform
One access point
One order book
One rulebook
One settlement system
One clearing system
A single market
Customer
benefits
OMX Exchanges – Market integration process
The CSE perspective
Hans Ejvind Hansen Chairman of CSE’s Board of Directors
The CSE perspective
• Natural next step in CSE’s strategy
• The NOREX Alliance - a strong solution for CSE
• Major improvements of Danish marketplace for the past 7 years
• For a further development of the Danish securities market a new approach and governance structure is necessary
Average turnover per day
-
500
1.000
1.500
2.000
2.500
3.000
DKKm
Potential higher turnover in shares
Potential?
A strategic decision
• The timing is right– The European exchange landscape is transforming and
getting more competitive– The OM-HEX merger has been successfully completed– The advantages of the alliance model have been
harvested
• The conditions are right– New initiatives will benefit from consolidation of
management resources– Danish interests and marketplace advantages are
safeguarded– The price is attractive
Transaction structure and future governance
Jukka Ruuska President, OMX Exchanges
Transaction terms and structure
• Total value of CSE DKK 1,220 m including net cash of DKK 258 m
• Existing CSE shareholders may choose between: 1. Cash2. Newly issued shares in OMX3. A combination thereof
However, the proportion of new shares will correspond to a max value of DKK 500 m
• If maximum no of shares are issued, CSE shareholders will own 5.8% of OMX (OMX share price of SEK 85)
Transaction conditions
• Due diligence
• Minimum 90% acceptance from CSE’s shareholders (with possibilities to complete the transaction at lower level)
• OMX EGM approval
• Necessary regulatory approval
Exchanges within OMX
OMX AB
OMX Exchanges OMX Technology
CopenhagenStock Exchange
StockholmStock Exchange
HelsinkiStock Exchange
BalticExchanges
Advisory Committee
Advisory Committee
• To secure continued input from the Danish market participants an Advisory Committee will be established
• The Advisory Committee shall consists of representatives of members and issuers (50% issuers, 50% members and 1 independent chairman)
• The Advisory Committee must be consulted about material changes to regulatory issues for which CSE is responsible. Material changes to disclosure requirements for issuers cannot be introduced if a majority oppose.
OMX Board of Directors
OMX Board of Directors
1 Danish representative
OMX ExchangesBoard of Directors
3 Danish representatives
CSE’s proposal for Danish representation
OMX Board of Directors
Danish representatives• Henrik Normann, Danske Bank(to be proposed to Nomination Committee)
OMX ExchangesBoard of Directors
Danish representatives•Christian Clausen, Nordea•Peter Engberg, Nykredit•Hans Munk Nielsen, TDC
Major shareholders Number of sharesShare capital
& votes, %
Investor AB 12 950 507 11.2
Robur funds 9 333 222 8.1
Swedish state 7 993 466 6.9
Nordea bank 6 595 078 5.7
FöreningsSparbanken 4 151 312 3.6
AMF Pension 4 010 000 3.5
Nordea Fonder 3 477 335 3.0
Didner & Gerge Funds 3 450 000 3.0
Other Swedish owners 46 642 732 40.4
Other non-Swedish owners 16 943 363 14.7
Total number of shares 115 547 015 100
Ownership structure, OMX (October)
Major shareholders Number of shares %
Danske Bank 55 751 13.9
Nordea 45 602 11.4
Nykredit 44 911 11.2
Alfred Berg / ABN AMRO 27 417 6.9
A.P. Møller Mærsk 25 704 6.4
Sydbank 22 181 5.5
Other shareholders 178 434 44.6
Total number of shares 400 000 100
Ownership structure, CSE (October)
Advantages to the Danish marketplace
Hans-Ole JochumsenPresident and CEO, CSE
Improved long-term competitiveness
• Operations synergies - use of best practice
• New products and services opportunities– Equities– Derivatives– Fixed-income – IR
• More efficient decision making
• Potential in developing a fully integrated market
Danish interests safeguarded
• “Business as usual” – Danish regulation, supervision and disclosure requirements maintained
• Danish self-regulation and Advisory Committee
• Danish representatives on OMX and OMX Exchanges board of directors
A Danish stock exchange with significantadvantages
• Continued local appeal to local investors
• Danish segments are maintained (KFX, MidCap+, SmallCap+ etc)
• Danish organisation to serve the Danish customers
New opportunities in an integrated Nordic marketplace• Danish securities market becomes part of international
liquidity pool – larger home market
• Transparent Nordic market with easy access – more members
• Nordic benchmark indices
• Nordic product development
• Increased liquidity and trade
Preliminary timetable
• Signing of Combination Agreement December
• Prospectus made public December
• Acceptance period Q1, 2005
• OMX Extraordinary General Meeting Q1, 2005
• Completion Q1, 2005
• Announcement of new organization Q1, 2005