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Borse Dubai, Nasdaq’s largest shareholder, is selling one third of its 15.53% stake in the stock exchange operator for up to USD 1.6 bn, according to a statement. The firm is selling 27 mn shares at USD 58-60 apiece, with plans to agree to an 18-month lock-up on the rest of its shares, which would amount to a 10.8% stake — making it the second largest shareholder in the company. This will give it the right to designate a board nominee.
The firm is also granting underwriters a 30 day-option to buy up to 4 mn additional shares, the statement said. This would bring Borse Dubai’s stake down to 10.1%.
Why it’s selling: “Today’s offering is being conducted to enhance the capital structure and liquidity within the Borse Dubai Group,” Chairman and CEO of Borse Dubai Essa Kazim said. “We have not only been a shareholder in Nasdaq for the past 16 years, but Nasdaq is also a key technology and brand partner for our exchange group and we believe in the strategic vision for the company, [and] we look forward to a continued relationship as a partner,” Kazim added.
Background: Borse Dubai acquired a stake in Nasdaq in 2008 as part of a four-way transaction that also saw it snap up shares in London Stock Exchange, before shedding its stake in LSE in 2015.
Market reax: Shares of Nasdaq fell 3% in extended trading following the news.
ADVISORS- Morgan Stanley and Goldman Sachs are joint lead book-running managers for the transaction. JP Morgan is acting as capital markets advisor to Nasdaq.
