Hedge funds have entered the fray in battle for Scandinavian exchange owner OMX, acquiring around 25% of the bourse, according to a UK newspaper report.
State-owned holding company Borse Dubai and US exchange owner Nasdaq are currently vying for control of OMX, which runs exchanges in the Nordic and Baltic regions.
Anticipating a full-blown bidding war, hedge funds have snapped up around 32 million OMX shares from Swedish institutional investors at an average price of SC212, with the hope that the ensuing fight will drive up the stock price, according to the Financial Times.
“When you see what has happened with the London Stock Exchange and Euronext it is not far-fetched to think there could be a bidding war for OMX as well. It is not rare for a bid situation like this to trade above the bid price,” one hedge fund involved told the newspaper.
Bankers have said the move by the hedge funds could improve Borse Dubai’s changes when it launches a formal takeover bid for OMX, which is expected soon.
OMX management and a key shareholder, Swedish holding company Investor, are backing Nasdaq’s bid for the exchange, despite the price Borse Dubai has paid per share for its stake being higher than what Nasdaq has offered.
The Swedish government, which owns 6.6% of OMX, has also said that price is not the only consideration.
However, fund managers will be more likely to back Borse Dubai’s bid because of the higher price it is offering compared to that of Nasdaq, according to bankers.
In a bookbuilding operation last week, Borse Dubai took control of shares and options for a stake of around 27.5% in OMX.
Borse Dubai, a holding company for Dubai government’s stakes in Dubai Financial Market (DFM) and Dubai International Financial Exchange (DIFX), offered SC230 per share for its stake, trumping the offer of SC208 made by Nasdaq back in May.
Nasdaq’s bid for the whole of OMX was worth around SC203 per share on Monday.
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