Qatar Holding on Tuesday curbed its aspirations to bid for Nordic Exchange OMX to focus instead on a potential deal to become the biggest shareholder in the London Stock Exchange.
Qatar has said it has no plans to make an offer for the LSE, but by building a stake it could help protect the London exchange, which has fought off several unwanted bids in recent years.
The Doha-based company, part of the state-owned Qatar Investment Authority, withdrew a request to Swedish regulators for approval for a potential bid for OMX, dousing hopes for a higher offer and leaving the way clear for Nasdaq and Borse Dubai to reel in the Nordic operator, analysts said.
OMX shares fell on the news and closed down 2.3 per cent at 259.5 crowns, just underperforming a 2.0 per cent fall in the broader market.
"The share was trading above the offer level, showing that some people had hoped for another offer," West LB analyst Johannes Thormann said.
Sources familiar with the matter told Reuters that talks between Qatar and Borse Dubai about exchanging Qatar's 10 per cent stake in OMX for at least part of Dubai's holding of about 20 per cent in the LSE have progressed and a deal was close.
The sides have been exploring the swap, which the sources said could now come within days or weeks.
The value of the OMX stake held by Qatar, which also owns about 15 per cent of the LSE, is equivalent to about five per cent of the London exchange's shares, so any straight swap would give Qatar about 20 per cent and Dubai about 15 per cent of the LSE.
Qatar Holding could however purchase a slightly larger stake in the LSE if it includes cash in any transaction.
Qatar Holding had been a potential rival suitor for OMX to state-run Borse Dubai which, teaming up with Nasdaq, has offered $5bn – or 265 crowns per share – for OMX.
The Qatari investment vehicle said in a statement it was withdrawing its application to Sweden's financial watchdog to be considered a suitable owner of OMX as it was no longer needed.
Borse Dubai declined to comment, and the QIA declined to comment beyond its earlier statement.
Sweden's financial watchdog said in a separate statement it was ending its scrutiny of Qatar's application dated October 2 to buy an unlimited number of OMX shares.
The OMX board of directors is considering the bid by Borse Dubai, which said in October the offer had received acceptances representing 47.6 per cent of OMX shares. (Reuters)