Nine years of operations later, the RASDAQ has ceased to exist as an independent entity on the capital market. The shareholders of the Bucharest Stock Exchange (BSE) and of the RASDAQ Electronic Market (REM), yesterday made the final decision to merge the two institutions, thus marking the closure of a project started two years ago.
"The General Meeting today approved the merger project, the BSE will secure the approval of the merger from the CNVM (National Securities Commission) and then there''s the registration with the Trade Registry. Practically, there''s only legal formalities left until the completion of the merger," stated Stere Farmache, the general manager of the Bucharest Stock Exchange.
The BSE was appraised at 8.1 million euros in view of the merger, and REM was appraised at some 0.82 million euros. Under the circumstances, the exchange ratio was set at 28.98 BSE shares for one REM share held, with the merger premium set at over 800,000 RON (220,000 euros).
The absorption of the RASDAQ will see BSE''s capitalisation increase by 2.17bn euros, brining it to a total of some 17.65bn euros. There are about 6,000 companies registered on the unified market at the moment. About one third of them will disappear, most of them RASDAQ issuers, which have not been trading for months. Out of the companies that will remain, the most liquid ones, about 170 in total, will be traded through the Bucharest Stock Exchange''s system, while the others will be traded on an alternative market. The BSE''s main problem is that, for years, roughly the same number of companies has been traded. The only significant new entries of the last two years are Flamingo and Broker.
BSE management will continue to be provided by the current Board of Directors after the merger, with elections to be held next year for new management members. "As this is a merger by absorption, by which the Bucharest Stock Exchange absorbed the RASDAQ, it is only natural that a management team should exist at the moment. In any case, at the end of January, when the merger will actually be completed, elections will be held for the Board of Directors, because the term of the current Board expires at that moment," Farmache explained.
The RASDAQ was established with funding from the US in 1996, and was the outcome of a project developed in co-operation with the United States Agency for International Development (USAID). The model used was the famous American market, NASDAQ. The first RASDAQ chairman was businessman George Paunescu.
The RASDAQ was the main capital market in Romania between 1997 and 2000, outrunning the Bucharest Stock Exchange in terms of traded value. This was due to most of the companies privatised through the Mass Privatisation Programme being listed on the RASDAQ. Had the issuer structure remained unchanged, the merger would have created one of the most important markets in the region. That is due to the fact that major companies like Sidex, or those in the cement industry, were first listed on the RASDAQ.
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