Borse Dubai launches rival bid for OMX

STOCKHOLM: Borse Dubai launched a takeover bid for OMX on Friday that values the Nordic stock exchange operator at 27.7 billion kronor ($3.95 billion) challenging a previous offer by the US-based Nasdaq Stock Market. The owner of the Dubai stock exchange is offering 230 kronor ($32.84) per OMX share. That is a premium of nearly 14% over the cash-and-share offer from Nasdaq, which struggled to gain a foothold in Europe before unveiling the OMX deal in May.

Speculation about a possible bidding war for OMX had run high since last week, when Borse Dubai said it had taken a 4.9% stake the company and was planning to raise that to more than 25%. OMX and the Dubai bourse would be a “winning combination” and the world’s fifth-largest exchange group, said Per Larsson, the former OMX chief executive who is now CEO of the Borse Dubai-owned Dubai International Financial Exchange.

He emphasised the offer’s premium to the Nasdaq bid and that it was “entirely in cash”, adding that OMX would gain access to one of the world’s largest liquidity pools while Dubai would profit from OMX’s technology knowhow. Dubai wants the joint group to expand in fast-growing markets, he said, focusing on the Middle East, North Africa and Asia, and said it would be open to “possible acquisitions in Europe”.

He declined to say whether the group planned to invite Nasdaq to an OMX-Dubai combination. OMX’s board said in a statement that it will “consider the Borse Dubai offer as compared to the Nasdaq offer” and will update shareholders of its view in due course. Shares in OMX fell 0.2% to 228.50 kronor ($32.63) in Stockholm. Johannes Thormann at WestLB said the share drop, now below Borse Dubai’s offer price, was mainly due to profit taking as the bid had been anticipated by the market.

“Now we’ll have to wait and see whether Nasdaq will make a counter offer, but the market seems to think that this is it for the moment.” Nasdaq’s cash-and-share offer, worth 208.1 kronor ($30.40) per OMX share in May, has dropped since then as it is dependent on Nasdaq’s share price and the Swedish exchange rate. Borse Dubai said it was currently worth 202.3 kronor ($28.89) per share.

Nasdaq, which earlier this year lost its battle to cross the Atlantic with a failed bid for the London Stock Exchange, has been under pressure to find a European partner since its rival the New York Stock Exchange completed a $14-billion acquisition of Euronext, which operates the Paris, Amsterdam, Brussels, and Lisbon stock exchanges.

NYSE Euronext formed not only the first trans-Atlantic financial market, but the world’s largest, and was part of a global rush for exchanges to find partners or be left out of a massive consolidation push as bourses aim to provide round-the-clock trading. Many analysts believe Nasdaq planned to use the OMX acquisition to persuade LSE shareholders to agree to a deal creating a giant European exchange.

Nasdaq asked OMX shareholders Friday to support its recommended offer, saying the number of listed companies on a Nasdaq-OMX group would compare “favourably” to a Dubai combination, where the exchange has “only 51 listed companies dominated by one issuer”. “We remain convinced that our offer to merge with OMX is in the best short and long-term interest of all OMX shareholders,” said Nasdaq CEO Bob Greifeld, who will be in Stockholm on Monday and Tuesday to meet with business leaders, political parties and OMX shareholders.