Thursday, Aug 09, 2007

(This updates an article published at 1146 GMT with comment from Nasdaq Stock Market Inc. and Investor AB.) 


 
   By Andrew Critchlow and Ian Edmondson 
   Of DOW JONES NEWSWIRES

STOCKHOLM (Dow Jones)--Shares in OMX AB (OMX.SK) climbed nearly 7% Thursday as newly-merged Borse Dubai said it is looking to buy as much as 25% in the Nordic exchange operator, raising the prospect of a bidding war with Nasdaq Stock Market Inc. (NDAQ).

Borse Dubai said it was buying OMX ordinary shares at 230 Swedish kronor ($34) and "entering into options for OMX AB ordinary shares at an exercise price of SEK230" in a book-building process with selected investors.

Government-owned Borse Dubai, created through the merger of Dubai Financial Market and the Dubai International Financial Exchange, added that it isn't obligated to exercise those options unless it acquires an interest in at least 25% of OMX shares.

The Dubai exchange hasn't yet decided if it will launch a full bid for OMX, according to a person familiar with the matter.

At 1300 GMT, OMX shares in Stockholm were up SEK13, or 6%, at SEK230.

OMX agreed in May to be bought by Nasdaq in a cash-and-share deal worth worth $3.7 billion, or SEK208 a share, a 19% premium at the time. It operates stock and derivatives exchanges in Sweden, Denmark, Iceland, Finland and in the Baltic countries of Estonia, Latvia and Lithuania.

The moves highlight the quickening pace of consolidation in the exchange business. U.S. rival the New York Stock Exchange acquired pan-European exchange Euronext in April to form NYSE Euronext (NYX).

As well as bidding for OMX, Nasdaq also holds a 30% stake in the London Stock Exchange (LSE.LN) which Wednesday gained shareholder approval to buy Milan-based Borsa Italiana SpA for around GBP1.6 billion.

Speculation has been growing that a counterbid for OMX could emerge, with the Dubai exchange operator topping a list of potential suitors as it seeks to strengthen its operations. Aside from a full bid, Dubai Bourse could retain a large stake in any Nasdaq-OMX group, benefiting from being part of a large transcontinental exchange group and the trading experience and technology within it.

Nasdaq urged shareholders to take no action with respect to Borse Dubai's conditional offer for a minority stake and said it remains fully committed to its recommended offer for OMX. Its offer is conditional on receiving 90% acceptance from OMX shareholders and OMX's largest shareholders agreed not to consider any rival bid under SEK220 a share.

Swedish investment company Investor AB (INVE-B.SK), OMX's largest shareholder with a 10.7% stake, said it continues to support Nasdaq's bid.

"We have supported the bid and entered into an agreement with Nasdaq to accept it under certain conditions," said Investor spokesman Fredrik Lindgren. He declined to comment on whether Investor would consider another bid, or whether Investor has been in talks with Borse Dubai.

The Swedish government, a 6.6% stakeholder in OMX, has said it plans to divest its stake as part of a state-owned asset sale and last month appointed a committee to investigate the consequences of the merger with Nasdaq. It is due to present results by Sept. 28. The Swedish government declined to comment Thursday.

OMX declined to comment.

Company Web site: http://www.omxgroup.com

-By Andrew Critchlow and Ian Edmondson, Dow Jones Newswires; +9714 364 4960; andrew.critchlow@dowjones.com

(Nikhil Lohade and Alistair MacDonald contributed to this article.)

(END) Dow Jones Newswires

09-08-07 1329GMT