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Sen. Charles Schumer (D-NY) is urging Treasury Secretary Henry Paulson to scrutinize the proposed purchase by Borse Dubai of 20% of the Nasdaq Stock Market. The complex deal, which values the Nasdaq at $41.04 per share, would give Borse Dubai 5% voting rights. It allows the Nasdaq to purchase a controlling interest in Nordic exchange operator OMX, for which it has been battling with Borse Dubai, in exchange for the 20% stake in itself as well as almost its entire stake in the London Stock Exchange. Schumer, who considers Dubai a "nexus of terrorism," told Paulson he believes "the acquisition of such a large stake in a U.S. exchange by a foreign government raises some serious questions." President Bush recently signed a bill into law that toughens the review process for such transactions. "We're going to take a good look at [the Nasdaq deal], as to whether or not it has any national-security implications," Bush said Wednesday. Last year, the Treasury approved the purchase of several U.S. ports by Dubai Ports World, but the company ultimately withdrew in favor of a U.S. firm in the face of Congressional opposition. Following that experience, Dubai has hired two U.S. lobby firms and begun what the WSJ calls a "charm campaign" to sway members of Congress in favor of the Nasdaq sale.

Sources: Financial Times, Wall Street Journal, Reuters, Dow Jones
Commentary: Nasdaq Close to Selling LSE Stake to Borse Dubai - WSJNasdaq and Borse Dubai May Form Joint Bid for OMX -- Daily TelegraphBorse Dubai’s Dealings Found Illegal
Stocks/ETFs to watch: NDAQ. Competitors: CME, NYX, BOT, ICE, ISE. ETFs: EXB
Earnings call transcript: The Nasdaq Stock Market Q2 2007

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Source: Schumer on Nasdaq Sale: Not So Fast