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Tue 22 Dec 2009 08:50 AM

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DFM makes $121m offer for Nasdaq Dubai

UPDATE 1: Offer comprises $102m in cash and 40 million in DFM shares.

Dubai Financial Market said it has bid to buy Nasdaq Dubai for $121m, to broaden the Gulf bourse's asset classes for investors.

As part of the merger, which had been expected to happen for months, the two markets would keep operating as two independent bourses.

DFM said the offer -- which has been accepted by Borse Dubai and Nasdaq OMX Group and is subject to conditions including regulatory approval -- comprises $102m in cash and 40 million DFM shares.

DFM said it would restructure itself "in the near future" into a holding company, to meet the guidelines of the two regulatory agencies -- Dubai Financial Services Authority and the UAE's Securities and Commodities Authority -- which oversee the bourses.

"This holding company would wholly own both DFM and Nasdaq Dubai, which would continue to operate as two distinct markets," DFM said in a statement.

There are 65 companies listed on the Dubai Financial Market index while Nasdaq Dubai has 14 listed companies, including DP World and other securities.

Dubai set up Nasdaq Dubai, formerly DIFX, in 2005 to encourage local companies to sell shares to the public and to help foreign investors tap regional wealth.

Nasdaq OMX acquired a one third stake in Nasdaq Dubai, where shares can list in UAE dirhams and in dollars and according to international protocols, in 2008.

Shares on the DFM are listed in UAE dirhams and follow local rules.

The timetable for the completion of the transaction is approximately six weeks, DFM said.

Goldman Sachs International and legal firm Al Tamimi & Company advised DFM. Nasdaq OMX will have a minority stake of 1 percent in DFM, and will not require issuance of new shares, DFM said. (Reuters)

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