Nasdaq, Borse Dubai bidding war possible

DUBAI — A bidding war between the US stock exchange, Nasdaq, and Borse Dubai for the Nordic stock exchange operator, OMX AB, could ensue if Nasdaq increases the value of its bid, as a source close to the transaction said, according to a Dow Jones report.

By Lucia Dore (Assistant Editor, Business)

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Published: Wed 19 Sep 2007, 9:01 AM

Last updated: Sat 4 Apr 2015, 11:41 PM

It is expected that Nasdaq will use the cash generated from the sale of its 31 per cent share in the London Stock Exchange (LSE) to sweeten the $3.78 billion cash-and-share offer it made for OMX in May. The Qatar Investment Authority (QIA) has reportedly offered $5.6 billion for the stake. A Nasdaq spokesperson in London yesterday declined to comment on the likelihood of the company increasing its offer.

However, Adena Friedman, an executive vice president of strategy at Nasdaq, has also been quoted as saying the exchange remains "flexible" regarding its offer. Friedman said the firm was focusing on gaining regulatory clearance but, once that has been obtained, Nasdaq will evaluate the structure of its bid. Friedman confirmed the evaluation could lead to an increased offer.

Borse Dubai, the holding company for the Dubai government shares in the Dubai Financial Market (DFM) and the Dubai International Financial Exchange (DIFX), trumped Nasdaq's bid last month with a $4 billion all-cash offer. This is equivalent to 230 kronor ($34) a share compared with Nasdaq's 210 kroner ($31) a share. Borse Dubai now holds 4.9 per cent of OMX's shares with options agreements to buy 23.5 per cent more.

Borse Dubai and Nasdaq have been locked in fierce battle for the past month to wrest control of the Nordic exchange. Although each is emphasising its superior "strategic fit" with OMX, price cannot be dismissed. "Nasdaq is well aware that a large portion of the shares is the hands of shareholders who are looking at the price," said the source quoted by Dow Jones. A Borse Dubai spokesperson has, for example, said its offer is a "growth story" and "not really about cost synergies".

Nasdaq has a October 12 deadline to send out its complete OMX offer document to shareholders. Borse Dubai submitted its offer document to the Swedish Financial Supervisory Authority (SFSA) on September 14. On Monday it sent out a notice stating that it had submitted its application for permission to acquire shares in OMX to the SFSA.

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