In a deal announced early Thursday, Dubai market operator Borse Dubai and US group Nasdaq said they had joined forces to acquire OMX together in a deal that would give Borse Dubai 19.99 percent of US-based Nasdaq and 28 percent of the London Stock Exchange.
The companies had previously been competing to buy OMX.
But just when OMX’s fate appeared to be sealed, a state-owned Qatari investment fund jumped into the fray and bought 9.98 percent of OMX shares and urged OMX shareholders “to take no action with respect to the revised conditional offer by Nasdaq/Borse Dubai.”
Dubai and its neighbour Qatar are both seeking to become the Middle East’s centre of global trading. Both emirates have an independent market regulator.
Shares in OMX closed up by almost 7.69 percent at 269 kronor following speculation that Qatar’s interest in OMX could lead to a bidding war.
“Who knows how far the bidding could go, just like Dubai, they’ve (Qatar) got more money than God,” Thomas Johansson, an analyst at Kaupthing Bank, told financial newswire Thomson Financial News.
In the complex takeover proposal presented by Nasdaq and Borse Dubai on Thursday, the groups said the United Arab Emirates group would follow through on its previously announced 230 kronor per share offer for OMX.
The August 17 bid valued the group at $3.97 billion dollars.
The US-based Nasdaq stock market would then acquire all of Borse Dubai’s OMX shares.
The UAE exchange would in return acquire 19.99 percent of the shares in Nasdaq and would also get 28 percent of the London Stock Exchange (LSE) from Nasdaq.
Nasdaq, which was the LSE’s biggest shareholder with a 31-percent holding, said last month that it wanted to sell up after a failed hostile takeover attempt for the LSE.
The US exchange will meanwhile become a strategic shareholder in the Dubai International Financial Exchange (DIFX).
As well as competition from Qatar, the deal could face an obstacle in the form of US regulators.
President George W. Bush said US authorities would probe security implications of the proposed acquisition of a stake in Nasdaq by Borse Dubai.
Bush said that the proposed tie-up would be examined under a new law introduced this year to assess national security risks posed by US assets being sold off to certain overseas investors.
The Qatari interest in OMX is through the Qatari Investment Authority which announced it had bought 9.98 percent of OMX.
The group also said Thursday that it had bought a 20-percent slice of the London Stock Exchange.
OMX operates the stock markets of Copenhagen, Stockholm, Helsinki, Reykjavik, Riga, Tallinn and Vilnius.
On Thursday, Nasdaq chief executive Bob Greifeld said in a statement the Nasdaq-Borse Dubai deal would create a unique, global exchange.
“Taken together, these strategic actions will provide us with a footprint unlike any other exchange, creating a global exchange leader, with operations in key markets around the world,” he said.
“We are pleased that Borse Dubai has decided to become a shareholder in Nasdaq. This better positions New York, as well as the US, to successfully compete with other global financial markets,” he said.
Borse Dubai, whose chief executive Per Larsson is a Swede who once headed OMX, will however have limited voting rights in Nasdaq of five percent.
The chairman of Borse Dubai, Essa Kazim, said: “Our primary objective is to build a world class, growth-oriented exchange out of Dubai and to become the centre for capital markets activities in the emerging markets.”
The board of OMX and the Swedish state, which owns 6.6 percent of OMX, both said they would study the offer.