Borse Dubai has been found guilty of breaching stock market
practice in the course of its takeover attempt of OMX,
according to Swedens Security Council. The council also
concluded that the exchange had however treated shareholders
equally during the process.
OMX requested that Securities Council investigate Borse Dubai
in the wake of the latter buying a 27.4% stake in the Nordic
exchange prior to the announcement of a full takeover bid on
The Council concluded that Borse Dubai was guilty of breaching
stock market practice, following its book building
process. Securities Council said that Borse Dubai's
disclosure of plans on 9 August to buy options in OMX had
failed to explain that the plans were directly
linked to an offer to buy the Swedish exchnage.
Even if the press release is viewed as information of a
started book-building process, it's regarded to have breached
good practice on the stock market, the council
This summary follows the announcement from Swedens FSA
Finansinspektionen - that Borse Dubai was also guilty of
breaking Swedish takeover law following the acquisition of a
27.4% stake in OMX. Finansinspektionen said that the press
statement, released following the announcement of the acquired
stake, constituted a formal takeover offer therefore deeming
the exchange at fault.
Although no punishment was imposed by the regulator, as the
Dubai exchange latter submitted a full takeover offer, Borse
Dubai has revealed it will appeal against the decision.
We accept the view of the Securities Council that we
ought to have included further information on the option
contracts, OMX CEO, Per Larsson, said in a statement.
But based on the circumstances at the time for the
release, particularly the fact that no decision had been made
whether or not to make an offer, we believe our press releases
provided the market with timely, correct and relevant
Despite the appeal the battle for control of OMX remains
intensive, with Nasdaq employing JPMorgan and UBS to assist
with the sale of its 31% stake in London Stock Exchange. The
move comes amid speculation that the American exchange may use
the capital raised to return with a second bid following its
$3.7bn bid submitted on 25 May. This was later surpassed by
Borse Dubais $4bn offer, on 17 August.
The board of OMX has, as a part of the assessment, sent a
question to the Securities Council, in order to make sure that
all shareholders of the company have been treated
equally, OMX said. The Security Council has
announced its view on this issue and the Council concludes that
the shareholders that entered into options
agreements with Borse Dubai did not receive better conditions
that the other shareholders, the statement continued.
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