Thursday, Jan 31, 2008

(Adds detail and CEO comment.)



By Jenny Clevstrom
Of DOW JONES NEWSWIRES

STOCKHOLM (Dow Jones)--Nordic stock exchange operator OMX AB (OMX.SK) - which has agreed to a $4.9 billion takeover offer from Borse Dubai and Nasdaq Stock Market Inc. (NDAQ) - Thursday reported a 32% decline in fourth-quarter net profit as costs rose and the year-ago result was flattered by a capital gain.

"It now appears that the merger with Nasdaq will become a reality and may be completed in the first quarter," OMX Chief Executive Magnus Bocker said in a statement. "This will generate even more opportunities to position OMX in the global area."

OMX - which operates bourses in Stockholm, Helsinki, Copenhagen, Iceland and the Baltic countries - said fourth-quarter net profit dipped to SEK200 million ($31.4 million) from SEK295 million in the year-earlier period.

The quarterly result was capped by what it called an extraordinary charge of SEK83 million related to VAT, while the year-ago result was flattered by a gain of SEK83 million attributable to the sale of shares in VPC AB.

"I'm very pleased with the report this morning," CEO Bocker told CNBC, adding that OMX had benefited in the quarter from the high market volatility.

Total revenue at the Stockholm-based company rose to SEK1.11 billion from SEK1.03 billion a year earlier, but costs shot up to SEK866 million from SEK674 million a year earlier, due to the VAT charge and increased product introduction and technology operations.

OMX said it sees OMX's total revenue for 2008 to be around SEK4.55 billion, with an operating profit of about SEK1.3 billion and net profit of SEK930 million.

Nasdaq and Borse Dubai joined forces last fall, bidding $4.9 billion for the Nordic operator. The deal, which would eventually fully transfer OMX ownership to Nasdaq and link trading centers in the U.S., Europe and the Middle East, is expected to close in February.

The OMX board has unanimously recommended Borse Dubai and Nasdaq's offer, and the two have the green light from the Swedish Financial Supervisory Authority and from the Committee on Foreign Investment in the U.S.

The Swedish government, which holds a 6.6% stake in OMX, has said it will announce its decision on whether to back the deal Thursday. Analysts, however, see the decision as a formality and say it's already a done deal.

Borse Dubai and Nasdaq reached their complex pact over OMX in September after having competed with each other over the exchange for six weeks.

Under the agreement Borse Dubai would buy OMX and then transfer ownership to Nasdaq in return for a 19.9% stake in the new company. As part of the deal, Borse Dubai also bought Nasdaq's 28% stake in London Stock Exchange Group PLC (LSE.LN).

The offer is conditional on Borse Dubai getting acceptance from over 50% of OMX shareholders, and Nasdaq's subsequent acquisition of Borse Dubai's OMX shares is subject to Borse Dubai holding more than 67% of the shares following completion of the offer.

At 0943 GMT, OMX shares were flat at SEK263.5, outperforming a 1.5% dip in the broader Stockholm market.

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

-By Jenny Clevstrom, Dow Jones Newswires; +46 8 545 130 97; jenny.clevstrom@dowjones.com

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(END) Dow Jones Newswires

31-01-08 1016GMT