Singapore Exchange’s (S68.SG) US$8.3 billion ($10.8 billion) bid for ASX (ASX.AU) will face significant resistance from not only politicians but also shareholders on both sides of transaction, many of whom believe deal makes little financial sense. 

Fund manager who holds SGX stock, but declined to be named says it’s “a very, very risky deal for the Singapore Exchange because the bid is higher than the market cap of the exchange.” 

Meanwhile, Macquarie says tie-up will expose ASX shareholders to SGX’s significant leverage. Dow Jones Investment Banker analysis suggests SGX may need to increase cash component of its offer by 20%.