Dubai Exchange Vies for Global Role

Posted on September 21, 2007

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The Wall Street Journal
By Aaron Lucchetti in New York and Alistair MacDonald and Jason Singer in London
September 20, 2007 

A stock exchange owned by the government of Dubai emerged as the leading contender to win Nasdaq Stock Market Inc.’s stake of about 30% in the London Stock Exchange Group PLC and a minority stake in the U.S. exchange operator itself, people familiar with the matter said.

The deal could make Dubai, part of the United Arab Emirates, the first Mideast government to hold a significant stake in a U.S.-based stock-market operator. It would also give Nasdaq a 33% stake in a Dubai exchange designed to take advantage of developing markets’ growth.

Under terms being discussed, Nasdaq would sell just under 30% of the LSE, representing the vast majority of its stake, to Borse Dubai for slightly more than £14 ($27.94) a share, said people familiar with the matter. If it sold 30% or more, the buyer under United Kingdom rules would have to bid for the entire LSE. Shares of LSE closed yesterday at £14.53.

Borse Dubai would pay about $40 a share to take a stake in Nasdaq of less than 20% through a multistep deal in which Borse Dubai would buy Nordic exchange operator OMX AB in a cash deal and then sell it to Nasdaq for cash and shares, people familiar with the matter said. The deal could be announced as early as today and would likely give Nasdaq control of OMX. Nasdaq shares closed yesterday at $36.02. [more]

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