Wellington, May 8 NZPA - Sir Ron Brierley's Guinness Peat Group is adopting a wait-and-see attitude to a bid by New Zealand share market operator NZX Ltd for an Australian share market operator.

GPG owns 13 percent of NSX Ltd, a company NZX is trying to get control of by buying new shares.

That stake may be crucial as a vote to repeal a clause in NSX's constitution that prevents a person having voting power in excess of 15 percent must have the support of 75 percent of shareholders.

NZX wants to buy 78.5 million new NSX shares at 15 Australian cents each in a deal recommended by the NSX board.

That will give NZX 50.1 percent of the shares and it wants a majority of the board.

GPG's Australian-based executive Gary Weiss said that while there may well be some merit in the proposed strategic relationship the terms proposed did not look compelling.

GPG would wait for an independent expert's report.

The $A11.78 ($NZ15) million cost of the move will be funded by a mixture of equity and debt. NZX announced a $20.55 million pro-rata renounceable rights issue. Its shareholders can buy one share for every five held at $4 a share.

This Australian expansion by NZX comes nearly a decade after merger talks between the Australian Stock Exchange (ASX) and New Zealand Stock Exchange (NZSE) failed and after retiring ASX chairman Maurice Newman called the New Zealand market "internationally irrelevant".

NZSE demutalised, was renamed NZX, listed on the market it operates and under chief executive Mark Weldon expanded into new areas of business.

"The completion of the deal, if successful, will represent an important step forward for both organisations and for the capital markets on both sides of the Tasman," said Mr Weldon and NSX chairman Michael Costello.

NZX had a growth plan which could be executed at a low marginal cost and which would materially grow the value of NSX, Mr Weldon said.

The New Zealand market operator is expected to expand NSX by introducing New Zealand listings and also facilitate a listed debt market.

NSX currently has more than 110 company listings and operates a taxi licence trading and water trading market.

NSX reported a loss of $A12.58m in the six months to December 31 when it had cash balances of $A5.9m. The revenue in the six month period was $A1.1m. NSX had a market capitalisation of $A11.9m at that time.

If the deal announced today goes through NZX will have a majority of directors on the board of NSX and a majority of the shares.

NSX listed on the ASX in January 2005 and is regulated by the Australian Securities and Investments Commission (ASIC).

NSX targets small, high growth businesses. Australia has five licensed exchanges. Two are held by NSX -- the National Stock Exchange of Australia and the Bendigo Stock Exchange.

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