Nasdaq and Borse Dubai May Form Joint Bid for OMX -- Daily Telegraph

The Nasdaq Stock Market, which is in a bidding war with Borse Dubai for the Nordic exchange OMX (full story), might use its 31% stake (worth $1.6B) in the London Stock Exchange to submit a joint bid with Borse Dubai, The Daily Telegraph reported Monday. Borse Dubai bid $4B in cash for OMX last week, trumping Nasdaq's highest offer. Dubai has expressed interest in the past for LSE shares, however Nasdaq has said it will not unload all the shares to one buyer, presumably since UK law requires an automatic takeover bid by investors acquiring more than a 30% stake in a company. Reuters reports other interested parties in the LSE include NYSE-Euronext, Australia's ASX, Singapore's Temasek Holdings and the Deutsche Boerse. However, coverage by The Wall Street Journal raises doubt whether a buyer will emerge, due to the LSE's hitherto disinterest in a full-fledged merger. The Journal also notes concerns LSE shares are overvalued following a 130% run in the past two years. At any rate, Nasdaq plans to use LSE share sale proceeds to initiate a stock buyback and pay down debt. This should raise Nasdaq's share price and effectively raise the value of the Nasdaq's cash-and-share bid for the OMX.

Sources: The Daily Telegraph, MSN Money, Reuters, Wall Street Journal
Commentary: Borse Dubai’s Dealings Found Illegal • Nasdaq OMX Bid Aided by Swedish Politics • The Nasdaq Is a Buy on Valuation and Growth Catalysts
Stocks/ETFs to watch: NDAQ. Competitors: CME, NMX, NYX. ETFs: EXB
Earnings call transcripts: The Nasdaq Stock Market Q2 2007

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