Borse Dubai escapes censure over OMX

Sweden's market regulator has found that Borse Dubai broke takeover laws when it bought a stake in OMX, but declined to penalise the exchange.

The ruling by Sweden's Financial Supervisory Authority, handed down yesterday, clears the way for the emirate to push ahead with its £2bn bid for the Nordic exchange which threatens to trump a rival £1.86bn offer from Nasdaq. The New York exchange, led by the chief executive, Bob Greifeld, had been hoping that a negative decision from the regulator could have forced Dubai out of the running.

The FSA opened its inquiry after Borse Dubai bought 4.9 per cent of OMX shares on the open market and secured rights for another 23.5 per cent through options deals it signed with several hedge funds.

The exchange announced the share purchases on 9 August, though said nothing of its intentions for a full takeover bid. The FSA concluded that Dubai's initial move constituted a full offer, and had thus contravened the law. Borse Dubai, however, launched its 230kr (about £16.60) per share offer one week later. "Borse Dubai has breached the Act on takeovers in the stock market. Borse Dubai has subsequently complied with the Act. Therefore, no further action will be taken," the FSA said.

Borse Dubai acknowledged the ruling. It added: "We continue to believe that our all-cash offer of 230kr per share for OMX is in the best interests of OMX and its shareholders and represents long-term value for OMX stakeholders."

Mr Greifeld spent several days this week visiting OMX executives, customers and regulators. In comments to the Nordic press, he repeated his willingness to be "flexible" over the terms of his cash and share offer. Nasdaq's bid falls about £150m short of Dubai's. The firm announced this week that it would sell its 31 per cent stake in the London Stock Exchange. It could use some of the cash from the divestiture to sweeten the pot for OMX.