Now it’s crunch time in Stockholm: Sweden’s Financial Supervisory Authority (FSA) is examining Borsa Dubai’s $4 billion cash “bid” for OMX, the Swedish-Finnish exchange that has operations across Scandinavia and the Balkans. OMX management wants to be taken over by Nasdaq for $3.7 billion in shares, but shareholders may find the rival cash offer more to their liking.
The unfolding drama will be fascinating to watch, for a variety of reasons.
It’s not clear whether the Dubai offer is officially a bid – a statement issued last week seems to indicate it becomes an official bid once they get 25% of OMX shares, and they’re nowhere near that in outright ownership - but do own options putting them over the limit. Even the FSA isn’t sure whether last week’s announcement constitutes an official bid, but the intent is clear.
Leading Dubai’s charge is Per Larsson, a respected former head of OM who was squeezed out when OM merged with Helsinki’s Hex to form OMX.
Leading Nasdaq’s charge is Bob Griefeld, who has OMX management and Swedish politicians on his side. He also appears to have the backing of Sweden’s Wallenberg family and Swedish bank Nordea, according to the FT.
When Larsson was tossed, it was made easy because staid OM shareholders objected to his healthy compensation package – a package many in the industry feel was well-deserved, given his ability to develop innovative products in the previous decade.
But he’d been also held accountable for OM’s failed hostile takeover of the London Stock Exchange (LSE) in the late 1990s, and the LSE plays a central role in this drama as well: Nasdaq is abandoning its own failed bid for that platform to go after OMX, and the resulting entity would form a direct competitor to the LSE – while also sharing ownership of London’s EDX platform.
Any thoughts on the following: will the Swedish government block an offer from Dubai? Will OMX shareholders go for the cash? Is Larsson on a mission to rectify past slights? And what value would a Scandinavian-Arabian entity have over other competitors?