By Joanne Bladd
Proposed deal would merge the Abu Dhabi Securities Exchange with the Dubai International Financial Centre and Borse Dubai - report
Abu Dhabi is in talks to buy the 20 percent stake in the London Stock Exchange (LSE) owned by neighbouring Dubai in a deal valued at $1.5bn, it has been reported.
The proposed deal would see a merger of the Abu Dhabi Securities Exchange with the Dubai International Financial Centre and Borse Dubai, which owns the stake, said the Sunday Times, without identifying the source of the information.
The stake would form part of a wider buyout of Dubai’s financial assets, the report said.
A spokesperson for Borse Dubai was not immediately available to comment.
A spokesperson for the London Stock Exchange declined to comment.
Borse Dubai, which controls Dubai’s two stock exchanges, paid about $4bn for a stake in Nasdaq
OMX and 20 percent of the LSE, as part of a 2007
deal that saw Nasdaq merge with Sweden's OMX group.
The company last week sold shares in Nasdaq OMX Group to help pay $1.1bn of a $2.45bn term-loan ahead of schedule. It raised $497m from the sale of 22.78 million shares to Nasdaq and sold a further eight million Nasdaq shares to Investor AB, the holding company for Sweden's Wallenberg family.
It is thought the deal raised about $175m.
Borse Dubai has around $827m of debt maturing in February
2011 and the company said it would use the proceeds from the
Nasdaq share sales to meet these obligations.
The state-owned Qatar Investment Authority holds a 15 percent stake in LSE.
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Merging the DFM and ADX would make a great deal of sense and allow the IPO machine to start up again. However, it is not a project without problems, though ones that ought to be overcome.
This is great! The UAE only needs one stock exchange, merging these three now would help to provide liquidly to a market that needs it more than ever.