Borse Dubai in $4bn hostile offer for OMX
Borse Dubai confirmed market speculation yesterday when it launched an audacious $4bn (£2bn) spoiler bid for OMX, the Nordic stock exchange group.
The hostile offer trumps Nasdaq's recommended $3.7bn bid for the bourse and threatens to leave Bob Greifeld, the chief executive of the New York exchange, once again on the losing side of a bidding battle.
The bid caught OMX off guard. Borse Dubai's chief executive, Pers Larsson, met OMX management on Monday last week, but did not give the impression a bid was imminent.
Mr Greifeld, who failed to purchase the London Stock Exchange, signaled that he could sweeten his offer for OMX, the holding company for seven exchanges in the Nordic region. He said: "We remain in close dialogs with the management team and board of directors at OMX, and remain committed to structural flexibility and have the financial wherewithal to consider other approaches."
In the LSE battle, Mr Greifeld painted himself into a corner by resolutely refusing to up his offer even though the LSE's share price was trading well above the offer price. Borse Dubai's offer of 230 Swedish kronor (£16.80) per share represents a 13.7 per cent premium to Nasdaq's bid.
Despite being $300m short on price, Nasdaq urged OMX shareholders to support its "superior" offer. Mr Greifeld said the tie-up would create more long-term value for OMX investors. OMX shareholders would hold 28 per cent of the combined entity that would be equipped with "the best technology, most liquid trading platforms, over 4,000 listed companies and a record of successful integration. We believe this compares favorably with the Dubai exchange, with only 51 listed companies dominated by one issuer".
The Borse Dubai offer comes amid an investigation by Sweden's Financial Supervisory Authority into how the exchange secured options agreements from hedge funds giving it rights to purchase 23.5 per cent of OMX stock in a dawn raid earlier this month. Borse Dubai owns another 4.9 per cent outright.
In response to an initial round of questions from the FSA, Dubai said it secured the agreements after its bankers at HSBC called 70 hedge funds and institutions offering them the deal. Borse Dubai has until Monday to respond to a set of follow-up questions.Source
The hostile offer trumps Nasdaq's recommended $3.7bn bid for the bourse and threatens to leave Bob Greifeld, the chief executive of the New York exchange, once again on the losing side of a bidding battle.
The bid caught OMX off guard. Borse Dubai's chief executive, Pers Larsson, met OMX management on Monday last week, but did not give the impression a bid was imminent.
Mr Greifeld, who failed to purchase the London Stock Exchange, signaled that he could sweeten his offer for OMX, the holding company for seven exchanges in the Nordic region. He said: "We remain in close dialogs with the management team and board of directors at OMX, and remain committed to structural flexibility and have the financial wherewithal to consider other approaches."
In the LSE battle, Mr Greifeld painted himself into a corner by resolutely refusing to up his offer even though the LSE's share price was trading well above the offer price. Borse Dubai's offer of 230 Swedish kronor (£16.80) per share represents a 13.7 per cent premium to Nasdaq's bid.
Despite being $300m short on price, Nasdaq urged OMX shareholders to support its "superior" offer. Mr Greifeld said the tie-up would create more long-term value for OMX investors. OMX shareholders would hold 28 per cent of the combined entity that would be equipped with "the best technology, most liquid trading platforms, over 4,000 listed companies and a record of successful integration. We believe this compares favorably with the Dubai exchange, with only 51 listed companies dominated by one issuer".
The Borse Dubai offer comes amid an investigation by Sweden's Financial Supervisory Authority into how the exchange secured options agreements from hedge funds giving it rights to purchase 23.5 per cent of OMX stock in a dawn raid earlier this month. Borse Dubai owns another 4.9 per cent outright.
In response to an initial round of questions from the FSA, Dubai said it secured the agreements after its bankers at HSBC called 70 hedge funds and institutions offering them the deal. Borse Dubai has until Monday to respond to a set of follow-up questions.Source
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