Within the next 60 days, Borse Dubai will find out if the wrist-slap it got this week from Sweden’s Financial Supervisory Authority (FSA or, to avoid confusion with the UK regulator, the FI from the Swedish FinansInspektionen) will end its pursuit of OMX.
What happened is this: the Dubai group disclosed ownership of a 4.9% stake in OMX, but also quietly accumulated options on another 23.5%, giving it the ability to own 28.4% – provided the FI gives it approval to hold more than 10%, as is required under Swedish law.
After accumulating the options, Borse Dubai said in a press release it would officially announce its takeover bid once it owned 25% of OMX - a clear attempt to avoid formally announcing the bid so as to delay the mandatory scrutiny that would accompany it. Once a formal hostile bid is made, it has to be either consummated or abandoned within a certain period of time, after which a cooling off period is mandated before another bid can be launched.
The FI says that Swedish law requires all takeover bids to be announced openly, and that Dubai made its announcement surreptitiously, and then ruled that last week’s press release constitutes a formal bid. The clock is now ticking.
According to Swedish media, FI acting director Gent Jansson said the law could have allowed the imposition of a fine, and even the blocking of the bid, but chose not to do so because the announcement of a bid was sort of an announcement, and everyone knew what they were saying, even if they didn’t come out and say it.
Dubai could have argued that it’s a moot point: largely because the FI still has to approve any outright ownership above 10%, and hasn’t done so – either for Dubai or for Nasdaq, with whom OMX management wants to merge.
Either way, the cards are now on the table, and you can expect the innuendo and couched statements we’ve heard from Dubai up to now to take on a more concrete form.