Borse Dubai

From MarketsWiki

Borse Dubai

Founded	August 2007
Headquarters	Dubai, UAE
Key People	Per Larsson, CEO; Essa Kazim, chairman
Web site	http://www.borsedubai.ae

Borse Dubai is a state-controlled holding company, created in August 2007 to consolidate the emirate's stakes in the Dubai Financial Market (DFM) and the Dubai International Financial Exchange (DIFX) and provide a platform for international expansion in the financial services sector.

The company is building an international exchange platform through acquiring a 28 percent stake in the London Stock Exchange, and plans to take a 19.9 per cent stake in the Nasdaq OMX Group, formed from the combination of the Nasdaq Stock Market and OMX.

History and Structure

Borse Dubai is a state-backed enterprise created in August 2007 to "facilitate" co-operation between the emirate's two stock exchanges, improve the infrastructure for financial services and create a platform for international expansion.^[1]

The company, which is incorporated in the Dubai International Financial Centre, takes its mandate from the 2015 Dubai Strategic Plan, which identifies financial services and capital markets as a key focus for future economic development.

Borse Dubai owns 100 per cent of the Dubai International Financial Exchange and 80 per cent of the Dubai Financial Market, which is listed on its own exchange. The strategy includes efforts to boost listings and liquidity on both exchanges and introduce new products including exchange-traded funds, real-estate products and derivatives.

The Battle for OMX

Borse Dubai owns 100 per cent of the DIFX, with its stake set to fall to 67 per cent following the completion of its deal with the Nasdaq Stock Exchange to acquire OMX, the Scandinavian exchange and technology group. Nasdaq would take a 33 per cent stake in the DIFX, which would be rebranded as Nasdaq DIFX.

Borse Dubai announced on August 9, 2007 that it had acquired a 4.9-per cent stake in OMX at SKr230 a share, with options to acquire a further 22.5 per cent at the same price. An all-cash offer at SKr230 a share was launched on August 11 2007, valuing the company at SKr27.7bn, and challenging the agreed bid for OMX by the Nasdaq launched in May 2007.^[2]

The offer was challenged by Swedish regulators and faced competition from a rival bid from the Qatar Investment Authority.

On September 20, 2007, Borse Dubai announced a joint offer for the OMX with the Nasdaq. Under this deal, Borse Dubai will buy OMX for SKr265 a share and then hand it to Nasdaq in return for 19.9 per cent of the new company and Nasdaq's 28 per cent stake in the London Stock Exchange. The US group would take a stake in the DIFX. The acquisition is expected to be approved by OMX's shareholders in the first quarter of next year. ^[3]

The planned 19.99 per cent holding in Nasdaq OMX would include a 5 per cent ceiling on voting rights.^[4]

Borse Dubai is advised by HSBC.

On Jan. 31, 2008, the Swedish government agreed to sell its 6.6-percent share in the Nordic and Baltic stock exchange operator OMX to Emirates-based Borse Dubai, and subsequently to Nasdaq..^[5]