Dubai: As part of a debt repayment and refinancing deal, Borse Dubai, the holding company that controls Dubai Financial Market (DFM), on Thursday sold more than half its stake in the Nasdaq OMX Group. It remains the single largest shareholder in the group.
Borse Dubai, a significant shareholder in Nasdaq OMX and the London Stock Exchange (LSE), said in a statement that it sold 22.79 million shares of Nasdaq OMX to Nasdaq OMX Group for $497 million and placed 8 million shares of Nasdaq OMX with Nomura International for $175 million. Nomura has in turn agreed to sell these shares to Investor, the holding company of the Wallenberg family, pending regulatory clearance.
As part of the deal, Borse Dubai yesterday concluded a partial repayment and partial refinancing resulting in $1.1 billion early repayment of its $2.45 billion term loan facility. Emirates NBD and Nomura acted as financial advisers to the deal, the Dubai Government's Media Office said.
Borse Dubai also secured a three-year loan facility worth $428 million arranged by Nomura and Emirates NBD. Additionally, Borse Dubai, with support from its controlling shareholder, the Investment Corporation of Dubai (ICD), reached an understanding with its banks to complete the refinancing of the remaining portion of its existing $2.45 billion term-loan facility in advance of the maturity date at the end of February 2011.
"We are very pleased to have completed this refinancing and to have partially de-leveraged and partially extended the term of Borse Dubai's facility for a further three years," said Mohammad Ebrahim Al Shaibani, chief executive of ICD.
Nasdaq OMX said the stake Borse Dubai is selling represents just over half of its total investment in the company. It plans to raise $370 million on the bond market to help pay for the share buyback.
Share repurchase plans
Bob Greenfield, chief executive of Nasdaq OMX, described the deal as a win for both parties. "It allows us to be opportunistic and accelerate our share repurchase plans," he said.
Nasdaq OMX said in a statement it agreed to repurchase the stake from Borse Dubai for $21.82 a share. A complex deal between Borse Dubai and Nasdaq on September 21, 2007, led to a series of transactions that resulted in Borse Dubai acquiring 42.6 million new Nasdaq shares at an indicative price of $41.01 per share. After the deal was announced yesterday, the Nasdaq OMX share was trading at $24 per share.
After the sale of 30.79 million shares, Borse Dubai will hold more than 10 million ordinary shares in Nasdaq OMX Group.
"Borse Dubai remains a committed, long-term shareholder of Nasdaq OMX and by entering into these transactions it has been able to achieve its financing objectives while retaining substantial economic interest in Nasdaq OMX. Borse Dubai remains the single largest shareholder of Nasdaq OMX," said Al Shaibani.
Borse Dubai owns a majority stake in DFM. It also holds a stake of approximately 20 per cent in the LSE. In a recent interview, LSE chief executive Xavier Rolet told Gulf News that Borse Dubai is a long-term strategic investor and an early exit from LSE is unlikely.
