February 17, 2008

Borse Dubai says would consider Qatar bid for LSE

DUBAI (Reuters) - Borse Dubai said on Sunday it would consider selling a stake in the London Stock Exchange Group (LSE.L) to Qatar, but had not received any approaches and was unlikely to sell any stake in the short term.

Borse Dubai and the Nasdaq Stock Market (NDAQ.O) should close a $4.9 billion deal this month to buy Nordic and Baltic stock exchange operator OMX (OMX.ST). Under the tie-up, Borse Dubai gets Nasdaq's 28 percent stake in the London Stock Exchange (LSE).

"If the Qatari government wishes to strike a deal in the future then it would be subject to negotiation," Borse Dubai Chairman Essa Kazim told reporters.

Any stake sale would "absolutely not" occur in the short term, added Soud Ba'alawy, the firm's deputy chairman.

Qatar owns 15 percent of the LSE through the Qatar Investment Authority (QIA), its $60 billion sovereign wealth fund.

The QIA planned to use its stake in the LSE to develop its own capital markets, a person familiar with the fund told Reuters last month.

QIA subsidiary Qatar Holding and Borse Dubai were in talks for Qatar to exchange its 10 percent stake in OMX for at least part of Dubai's stake in the LSE, people familiar with the matter said in December.

Borse Dubai had not agreed on any deal "whatsoever" with Qatar on selling its stake when Qatar sold its entire OMX holding to Borse Dubai earlier this month, Kazim said. Borse Dubai owns 97.6 percent of OMX.


Borse Dubai planned to raise $4.2 billion in a syndicated loan to finance the acquisition, Mukhtar Hussain, global head of principal investments at HSBC, one of the bank's arranging the deal, told reporters.

Syndication would start this week in Hong Kong, London and Dubai and was likely to conclude by February 27, Hussain said.

Barclays Plc, Citigroup, Goldman Sachs, Bank of Tokyo-Mitsubishi and Emirates NBD are also mandated lead arrangers for the loan, he said, adding he was confident it would be fully subscribed.

Under the OMX deal, Nasdaq agreed to take a 33 percent stake in the Dubai International Financial Exchange (DIFX), set up by the government of Dubai in 2005 to operate according to international regulatory standards.

The exchange, to be re-branded as Nasdaq DIFX, planned to expand in the Middle East, Africa and Asia, as it seeks to tap into economic and population growth in emerging markets, Ba'alawy said.

First, however, the exchange would focus on building healthy pipeline of new listings of securities this year, Borse Dubai Chief Executive Per Larsson said, declining to be more specific.

U.S.-based NanoDynamics pulled out of a planned listing in Dubai, the DIFX said on Friday.

Shares of DP World (DPW.DI), the first firm to list shares exclusively on the exchange, have tumbled more than 30 percent since they debuted in November. Since then, global stock markets have tumbled on concerns about a global credit crisis and a possible U.S. recession.

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