UAE and Qatar join hands to overwhelm western bourses
LONDON, Sept 20: Global stock markets faced a radical shake-up on Thursday after Qatar and the United Arab Emirates attempted to propel themselves into the heart of major western bourses.
Bourse Dubai and the Nasdaq said they would join forces to buy Nordic exchange operator OMX in a complex deal which would hand ownership of the OMX to the New York-based market.
In return, Dubai would take the US group’s 28 per cent holding in the London Stock Exchange — and 19.99 per cent of the Nasdaq.
The Qatari Investment Authority (QIA) also revealed it had bought almost one-fifth of shares in the London Stock Exchange.
Thursday’s hectic news flow means that the prestigious LSE, which is Europe’s oldest stock exchange, could become almost half-owned by Qatar and the UAE if the Nasdaq-Dubai deal is completed.
However, the proposed deal looks set to run into major political obstacles in Washington and also faces a challenge from Qatar.
OMX looks set to become the centre of bidding battle after a Qatari investment fund said that it had snapped up 10 percent of OMX -- and appealed to OMX shareholders to take no action on the Dubai-Nasdaq offer.
Nasdaq, previously the LSE’s biggest shareholder, wants to sell up after its failed hostile takeover attempt for the London market.
Its deal with Dubai could be scuppered by US lawmakers, however.
President George Bush announced on Thursday that American authorities would probe the security implications of the tie-up between Nasdaq and Dubai.
Mr Bush said the deal would be examined under a new law introduced this year to assess national security risks posed by US assets being sold off to certain overseas investors.
New US procedures were introduced following a controversy which erupted when Dubai Ports World, another Dubai-controlled company, was forced to abandon the purchase of six US port operations on security grounds.
Analysts said the Nasdaq-Dubai acquisition of OMX was vulnerable to a higher bid, with most shareholders motivated by price.—AFP
