Nasdaq expects the sale of its London Stock Exchange stake to boost its stock price and enrich its bid for Nordic bourse operator OMX, target of a higher offer from Borse Dubai, Nasdaq CEO Robert Greifeld said on Tuesday.
Nasdaq cash-and-share offer is currently worth around 204 Swedish crowns ($29.29) a share, or about $3.7 billion, against Borse Dubai's 230 crowns per share, or $4 billion, all-cash bid.
Greifeld told Reuters he expected the sale of the LSE (LSE.L: Quote, Profile, Research) stake to happen in the next month or so, though it was impossible to predict exactly.
We do expect that to have a positive impact on our stock in the weeks and months to come, said Greifeld, in Stockholm to meet OMX shareholders, in a telephone interview.
And as a result of our stock climbing it obviously automatically increases, by default, our bid for OMX.
Nasdaq intends to use the funds raised from the sale of its 31 percent LSE holding to cut debt and buy back its own shares.
Greifeld said given a reasonable price-to-earnings multiple, Nasdaq shares could rise by around $10 as a result of the LSE deal, giving a de facto boost to its offer for OMX.
Say our stock goes up to say $40 dollars, then the implied bid for OMX becomes 230 or 232 (crowns per share) as a result of that because of the share component, Greifeld added.
Nasdaq shares were 0.51 percent higher at $31.41 at 1628. OMX shares closed in Stockholm at 239.50 crowns.
Stock exchanges around the globe have been looking at tie-ups to achieve global reach and economies of scale as members demand more sophisticated products and cheaper trading.
OMX owns and runs exchanges in Stockholm, Helsinki, Copenhagen, Reykjavik and the Baltic states. Adding to the Nordic company's appeal is the fact that it develops and sells exchange software, supplying more than 60 exchanges worldwide.
Borse Dubai wants OMX's technology platform and experience building exchange networks to grow in the Middle East, North Africa and central and southern Asia as well as Europe.
Our objective is to become one of the three largest exchange groups in the world, Borse Dubai Chief Executive Per Larsson told Reuters on Tuesday.
Both Larsson and Greifeld were in Stockholm this week to persuade shareholders on the merits of their respective bids.
Greifeld said the reaction of OMX shareholders to Nasdaq in the meetings had been uniformly positive, adding that they were truly gaining an understanding of the industrial and commercial logic of this transaction.
Greifeld said contrary to a report in the Financial Times, he had not tried to persuade key shareholders to opt for only shares if the Nasdaq deal went through.
The Financial Times reported earlier on Tuesday that Greifeld had been trying to persuade some investors to forego the cash part of the bid so it could raise the cash offering to hedge funds.
We have not had any discussion with respect to the various forms of election, Greifeld said, referring the proportion of cash and shares on offer.