THE CANDIDATE OF TEODOR ANCUŢA AT THE HELM OF SIBEX Patrick L. Young doesn"t want the merger with the BSE for now

• Patrick L.Young, the potential CEO of Sibex, claims that the Sibiu Exchange could be worth 50 million Euros in five years, but only as an independent entity

The former manager and his potential replacement at the helm of Sibex are sending mixed signals on the merger with the Bucharest Stock Exchange, on which the two shareholders are called to decide in about three weeks. The current chairman says he supports the merger, and the candidate he proposed as his replacement would like to delay it.

Patrick L. Young, the Irishman proposed by Teodor Ancuţa to take over the executive management of the Sibiu Exchange, yesterday said that a potential merger between the Sibex and the BSE would not benefit the domestic capital, at the moment. Patrick Young yesterday praised the accomplishments of the management of Sibex up to this moment, and he expressed his conviction that under his management, the Sibiu exchange could be worth about 50 million Euros in five years, as an independent entity and could reach a value of about 100 million Euros in another ten years. At the moment, the Sibiu Exchange is being valued at 51 million lei (12.47 million Euros), based on the price of 1.53 lei/share.

"At this moment, I don"t think it would be in the best interest of the domestic capital market to have a merger between the exchanges of Sibiu and of Bucharest", Patrick L. Young said yesterday, in a press conference, and he added: "Monopolies aren"t good in capitalism. If I were to use biology as a comparison, I would say that marriages between cousins are harmful to their offspring. Still, it is not my mandate to discuss the intentions of the two exchanges.

At this moment, I see the Sibiu Exchange as having a huge potential for growth, but I also see that this potential is not reflected in the current price of its stock". The Irishman said that he has begun buying SBX stock precisely due to the fact that the price is "very attractive" and that he plans to continue to invest in the Sibiu Exchange.

The Sibiu Exchange recently changed its name to Sibex Stock Exchange and received the approval for trading via nominee accounts, actions which raise doubts over its plans to resume talks about the merger, which were held in the beginning of the year.

Teodor Ancuţa, the current president-managing director of the Sibiu Exchange, yesterday admitted that he wouldn"t have begun talking about a merger if the financial results hadn"t worsened last year. Mr. Ancuţa said:

"I am still a supporter of the merger between the two exchanges, but I need to tell you that if the Sibiu exchange had posted better results, we wouldn"t be talking about this merger now. We are two weak exchanges though, and we need to merge to do better.

Regardless of whether the merger will take place or not, Mr. Patrick Young will remain in Sibiu and will handle the development of the derivatives market. At this moment, I think it would be a good thing to approve on principle the idea of the merger between the two exchanges, which is what will be attempted in the tow General Shareholder Meetings scheduled for the end of the month. After that, all that will be left to do will be for shareholders to decide on the parity between the shares of the two exchanges. We also talked to some of the shareholders of the Sibiu exchange and I know they can"t imagine that the Sibiu Exchange is worth just 12 million Euros. Maybe later, when the two exchanges will be stronger, the merger will take place ...Do you think that the shareholders of Sibex would still be considering the idea of a merger if they were paid big dividends? Am I"m talking about dividends paid out of the operating profit, not out of the financial profit".

Last year, the Sibiu exchange had a net profit of 237,723 lei, for a turnover of about 2 million lei. For comparison, in 2009, Sibex had a net profit of 1.3 million lei, for a turnover of 1.93 million lei.

• All eyes on the general shareholder meeting of April 29th

Teodor Ancuţa is hoping that Patrick Young will follow him as executive of Sibex starting with April, but in order to do that, he needs the support of the shareholders and of the Board of Directors.

The shareholders of the Sibiu Exchange will decide on the separation of the CEO and president positions, as Teodor Ancuţa plans to remain at the helm of the Board of Directors of the Exchange. On the other hand, Patrick Young would be elected by the directors of Sibex as CEO.

However, some surprises may appear, just like it happened in the previous general shareholder meeting of Sibex, when a group of shareholders which included Cristian Sima, the head of WBS Romania, requested the revocation of the Board of Directors and the appointment of a new one. Teodor Ancuţa says that he is ready for anything and that is not concerned over his seat at the helm of Sibex: "I think that at the General Shareholder Meeting everyone will vote in favor of separating the two positions. If the election of a new Board of Directors will show up on the Agenda, we will see what happens ...I"m not worried about myself, I am a shareholder of the Sibiu Exchange, I am its founder, I think I still have credibility ...I don"t cling to the position of CEO, I am content with what I"ve achieved so far and I think it is an accomplishment to have brought Mr. Young at Sibex".

The shareholders of the BSE and those of Sibex were summoned on April 29th to decide on principle on the merger between the two institutions.