Borse Dubai’s bid for OMX, the Scandinavian stock exchange operator and exchange technology provider, was still in the balance at time of going to press.
The Dubai holding group, which holds the government’s stakes in Dubai International Financial Exchange (DIFX) and Dubai Financial Market (DFM), was in a bidding war with US giant Nasdaq for control of OMX.
Borse Dubai was told by the Swedish Financial Supervisory Authority on August 23 that its stake in the company, which it built up to 23.4% by using options contracts, was adjudged to have been acquired illegally.
However, the regulator decided not to take any action against Borse Dubai.
The ruling could negatively affect Borse Dubai’s bid to acquire the exchange operator, which is given special protection as a strategic industry by the Swedish authorities.
The Swedish FSA has asked Borse Dubai to answer questions about the way in which it built up its stake in the company. Swedish law requires any purchase of more than 10% of a company to have regulatory approval.
Borse Dubai made an all-cash offer of US$4 billion for OMX on August 17, beating an offer of $3.7 bn in cash and shares that Nasdaq agreed in May. Nasdaq announced on August 20 that it would sell its stake in the London Stock Exchange to free up more cash for a bid.
According to Nasdaq, two large shareholders in OMX, Investor AB, which owns a 10.7% stake, and Nordea, which holds 5.3%, have agreed to accept shares in Nasdaq.
However, hedge funds, which own around 25% of OMX shares, are likely to favour the higher cash offer.
Borse Dubai has also said it will offer a Nordic investor a seat on the board if its bid is successful.
OMX provides technology for several Middle East exchanges, including Dubai Financial Market, and the CEO of Borse Dubai, Per Larsson, was formerly head of OMX Group.
Dubai Government launched Borse Dubai on August 6.
Essa Kazim, chairman of DFM and Borse Dubai, said at the time: “Given the rapid transformation of capital markets around the world, it was the right time to jointly build on the synergistic opportunities provided by both exchanges and to create Borse Dubai as a platform for further growth.”
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