Summer is traditionally a period of slowing bourse activity, but this year in Eastern Europe, a lot of people have been sitting up and taking notice.

The global credit crunch and the rising cost of financing has hurt bourses across the world, with emerging markets taking a bigger hit than most in terms of both daily turnovers and expected profits, but that has not made bourses in the region any less of an acquisition target. If anything, it seems to have sped up the process of consolidation, a topic talked about for years.

One bourse has already changed hands, with Vienna Stock Exchange (VSE) taking over 81 per cent in the Ljubljana Stock Exchange in June. The Prague bourse now is set to follow suit after its biggest shareholders said in August that they were ready to sell if the price was right. The Warsaw Stock Exchange at the end of July announced the sale of 60 to 65 per cent of the shares held by the Polish government, although the state plans to keep a majority of the voting shares. With more exchanges on the trading block, Bulgaria's Cabinet is in a good position to capitalise from the heightened interest if it decides to sell its 44 per cent stake in the Bulgaria Stock Exchange (BSE).

BSE's privatisation has been on the agenda for years and appeared to gather steam in 2007, when the exchange held a tender to pick a new trading platform. In the end, Deutsche Boerse sealed the deal, beating off competition from Nordic exchange OMX in the process, and its Xetra platform was implemented in June. The choice of the platform gives an advantage to Deutsche Boerse and VSE, both of whom already use the Xetra system. How much would the sale of Bulgaria's sole regulated stock exchange fetch, however?

Reconstruction Capital 2 (RC2), a closed-ended company created to invest in Bulgaria and Romania, has acquired 1.8 per cent in BSE for 500 000 euro, its second-quarter report submitted to the London Stock Exchange's Alternative Investment Market, where it is listed, showed. At that price, BSE's value is 27.8 million euro, or just more than 10 times its earnings for 2007. But that figure is based on BSE's best year to date, when a number of factors - Bulgaria's accession to the European Union, the inflow of new investors and strong growth of its indices - combined to triple the net profit and double the revenue figures from 2006. This year, with some investors withdrawing and the global credit crunch in full swing, BSE's performance has been less impressive and profit is expected to drop drastically.

Over the past five years, BSE has averaged an annual net profit of 1.15 million euro. Using this figure, RC2's valuation of BSE is 24.5 times the bourse's profit, which is fairly close to the price VSE reportedly paid for its peer in Ljubljana. The financial details of the deal were not disclosed, but reports in Austrian and Slovenian media claimed the price was 1400 euro a share, which valued the operator at 47 million euro and the price the Viennese operator paid for the stake at 37.6 million euro. That valuation is 31.8 times greater than the 1.48 million euro profit reported by the Ljubljana Stock Exchange in 2007.

The sale of the Slovenian bourse was the first in South Eastern Europe after a Hungarian-Austrian consortium bought the majority stake in the Budapest Stock Exchange in 2004. In June, VSE increased its stake in the Budapest stock market operator to 37.7 per cent. The Austrian bourse also has a co-operation agreement with the Bucharest Stock Exchange, but its regional ambitions are closely matched by those of the Warsaw bourse. The Polish operator has a small stake in Romania's Sibiu bourse, but has reached the ceiling of five per cent shareholding allowed by Romanian laws and is awaiting changes in legislation to up its stake. Although interested in its Czech peer, the Warsaw bourse could be out of the running because it is still state-owned and might not be privatised fast enough to take part in the bidding for the Prague bourse, where a deal could be clinched before the end of the year.

At the same time, VSE has shown interest in bidding for the Warsaw bourse, the only one in Eastern Europe whose market capitalisation exceeds its own: "We are always interested in principle in strategic stakes in central and eastern European stock market operators, if we are welcome as a partner," Vienna Stock Exchange spokesperson Beatrix Exinger was quoted as saying by Reuters.

But with OMX, Deutsche Boerse and Greek operator Helex also interested in acquisitions, its goal of becoming the main hub of stock trading in Eastern Europe looks like a tough one.