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DIFC silent on 'last-minute' Euronext bid

DIFC spokesperson Charles Skeeles, however, said the Dubai-based company, which a few days ago boosted its stake in Euronext from 1.67 per cent to 3.48 per cent, voted along with the exchange's management to support the bid by New York Stock Exchange (NYSE).

Speculation about DIFC's design on the exchange became rife yesterday in the wake of the vote by Euronext shareholders to reject an Annual General Meeting motion which would have declared that a merger with Deutsche Boerse is in shareholders' best interests.

The vote is not binding, as Euronext is proposing to call an EGM during which the rival bids from Deutsche Boerse and NYSE will be fully discussed.

"We decline to comment on such market speculation. We cannot also reveal our future plans as Euronext is operating in a highly regulated market," Skeeles told Khaleej Times.

Market watchers, however, said that Skeeles statement that DIFC could not reveal its future plans might be an indication that the Dubai-based company, which is seeking to expand its investments in foreign financial institutions, will not hesitate to further raise its stakes in Euronext in a dramatic last-minute swoop once a clear picture on the fate of the two bidders emerges. Their views echo those of Michiel Hessels, Euronext's supervisory board chairman, who had indicated that the exchange is thinking about a 'knockout bid scenario,' implying the company is hoping for the emergence of a white knight.

At Tuesday's voting, a total of 43.8 million shares were registered against the motion supporting Deutsche Boerse with 30.5 million in favour and around two million abstentions.

Between them, Euronext and Deutsche Boerse control virtually all of the exchange-traded derivatives markets in Europe, and about half of the global total.

Refusing to elaborate further on DIFC role in the takeover battle, Skeeles reiterated that investing in Euronext was "consistent with our focus and long term strategic aim of developing the Dubai International Financial Centre to complement those centres in Europe, United States of America and the Asia Pacific region."

In documents released in conjunction with the AGM, Euronext said it values NYSE's offer at 68 euros per share, compared with its 58 euros assessment of the bid by Deutsche Boerse.