Borse Dubai’s Dealings Found Illegal

Borse Dubai was found to have taken illegal actions in its acquisition of a 28.4% stake in Nordic exchange operator OMX AB. Both Nasdaq and Borse Dubai have targeted OMX as takeover target, and entered formal bids for the company (full story). Nasdaq submitted a $3.7 billion offer in stock and cash for the OMX on May 25, but was outbid by government-owned Borse Dubai, who offered $4 billion in cash. In an important blow to the success of Borse Dubai’s bid, Sweden’s Financial Supervisory Authority found that Borse Dubai had broken the law by failing to disclose its transaction, because they felt the move constituted a takeover bid. Though the Swedish authorities did not take any actions against Borse Dubai, saying the breach had been rectified by its subsequent buyout offer, it said the misstep will “be taken into account” when the authorities meet to decide if Borse Dubai is a “fit and proper” potential owner of OMX. Because Sweden sees the OMX as a strategic industry, any new owner must be authorized by regulators. Regulators can block any deal they feel does not meet their standards. The news comes as Nasdaq CEO Bob Greifeld has been meeting with large stakeholders of OMX to convince them that the Nasdaq offer is superior (full story). The Nasdaq has received support for its bid from members of the OMX board, large shareholders such as Nordea Bank, and the Swedish government (full story), who is also a 6% owner in OMX AB.

Sources: Financial Times, Business Week, MarketWatch
Commentary: Nasdaq OMX Bid Aided by Swedish Politics • Key OMX Shareholders Agree to All-Share Payment by Nasdaq -- FT • Borse Dubai Trumps Nasdaq's OMX Bid
Stocks/ETFs to watch: NDAQ. Competitors: CME, BOT, ICE, ISE, NYX

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