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Dubai: Borse Dubai, the newly formed holding company of Dubai International Financial Exchange and Dubai Financial Market is all set to make a $4 billion full takeover offer to shareholders of OMX this week, according to investment banking sources and media reports.
The UK's Sunday Times yesterday reported that the Dubai firm will seek the approval of the OMX board to make a full £2 billion ($4 billion) takeover offer for the exchange this week, to beat Nasdaq's $3.7 billion bid. Borse Dubai chairman Eisa Kazim was not available for comment.
Reacting to the reports, Bo Albertsson, a public relations representative for Borse Dubai told Gulf News from Stockholm yesterday that the company has no comments to offer on talks about a full-scale bid. "We have nothing more to say than what has been said in a statement on Thursday. We cannot comment on market talks," he said.
Borse Dubai currently owns 4.9 per cent of OMX and has options for 22.5 per cent. The options are through a book building process with some unnamed investors, taking Dubai's total potential stake to 27.4 per cent.
Last week's purchase of shares by Borse Dubai has come under regulatory scrutiny in Sweden.
Albertsson yesterday asserted that the Dubai firm complied with all Swedish laws while making the acquisition.
Valuation
While Nasdaq's current offer values OMX shares at 208.1 Swedish crowns ($30.75) each, Borse Dubai is offering 230 crowns ($34.26) a share, valuing OMX at 27.7 billion crowns ($4 billion).
"There is no logic in Dubai acquiring a large minority stake when it is not intending to take any management role in OMX. The size of the options indicate that the Dubai firm is serious about making a full-scale competitive bid," said a Dubai-based investment banker.
A competitive bid by Borse Dubai would mean that Nasdaq will now have to sweeten the offer to remain in the race. Nasdaq, which holds 25 per cent stake in the London Stock Exchange is also backed by private-equity players such as Hellman & Friedman and Silverlake. Bankers from JP Morgan, which is advising Nasdaq, has hinted that the American exchange is flexible in terms of revising the offer.
If Borse Dubai goes ahead with a full-scale offer it will be the first time that a non-European or US exchange is making a takeover bid for a European exchange. During the past two years stock exchange consolidation across Europe had resulted in more than $60 billion in M&A deals. Last year DIFC Investments, the investment arm of DIFC built up a 3.5 per cent stake in Euronext, now owned by the New York Stock Exchange.
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