Dubai stock exchange company makes bid to buy out OMX
Dasdaq merger could be in jeopardy
Mohammed bin Rashid Al Maktoum
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Magnus Böcker
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Borse Dubai, the owner of the two stock exchanges in Dubai, announced on Friday that it had made an offer worth EUR 3 billion for the Nordic stock exchange owner OMX. The offer by Borse Dubai is a challenge to a proposed merger between OMX and the American technology exchange Nasdaq.
Borse Dubai is offering 230 Swedish krona, or EUR 24.6 for each share of OMX stock. The value of the offer made by Nasdaq has declined from the original SKR 208 to about SKR 202, because of changes in Nasdaq's valuation and in the exchange rate of the krona.
The OMX board said that it would consider the offer by Borse Dubai and inform its shareholders how it views the matter.
The management of OMX has been preparing the merger with Nasdaq for several months. The OMX chief executive Magnus Böcker said this week that he is "deeply worried" about a possible offer from Borse Dubai. Böcker feels that Nasdaq would be the right partner for OMX.
So there is a possibility that the OMX-Nasdaq merger, which was all but a done deal, might collapse under pressure from oil money. Borse Dubai had done the groundwork for its offer the previous week by buying 4.9 per cent of the shares of the Nordic exchange company.
In addition, Dubai says that it has the option to acquire another 22.5 per cent share from several investment funds.
Because of the Borse Dubai options, Nasdaq might find it difficult to get the 90 per cent of OMX shares that had been set as a minimum in the merger agreement.
Reuters news agency reported that the agreement can be changed so that a 66 per cent majority would be enough.
The largest owner of OMX, Investor, has previously expressed its desire to sell its shares to Nasdaq. According to Investor, Dubai's offer is not necessarily better than that of Nasdaq.
Nasdaq and OMS have calculated that their merger would bring synergy benefits to the tune of 150 million US dollars, or EUR 112 million a year. Synergy benefits of a Borse Dubai buyout of OMX would be significantly less.
The Dubai bid was a pure cash offer to buy OMX, whereas the Nasdaq merger would involve an exchange of shares between the two bourses.
There are other impediments to the success of the Dubai bid than reluctance on the part of the OMX board. The Swedish Financial Supervisory Authority, Finansinspektionen (FI) is calling for more information from Borse Dubai on the measures that it took earlier this month to raise its holdings in OMX.
FI has a say in the matter, as its task includes making sure that any new buyer of the stock exchange would be a suitable master for the institution.
Borse Dubai is a holding company recently set up by the Dubai government, which combines the two bourses in Dubai. The new company was set up to promote Dubai's aim of strengthening the country's standing on the world's financial markets.
The company is backed by the massive fortunes of the family of Sheikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai.
Helsingin Sanomat
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| 20.8.2007 - TODAY |
 Dubai stock exchange company makes bid to buy out OMX |
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