Dubai, UAE – Borse Dubai, the parent company of the Dubai Financial Market, has initiated the sale of nearly a third of its stake in Nasdaq, the New York-based exchange operator. The sale is poised to generate $1.59 billion for the Dubai-based entity, reflecting a strategic reshaping of its investment portfolio.
Borse Dubai is offloading approximately 27 million shares at $59 each in a secondary offering, a decision revealed in a recent stock exchange filing. The offering also grants underwriters a 30-day option to acquire up to four million additional shares of Nasdaq, potentially altering Borse Dubai’s stake in the exchange operator significantly.
Upon completion of this transaction, which is contingent upon market conditions, Borse Dubai’s shareholding in Nasdaq will diminish to about 10.8%, equating to 62.4 million shares. Should the underwriters fully exercise their option, Borse Dubai’s ownership could further reduce to approximately 10.1%, or about 58.3 million shares.
This move marks Borse Dubai as Nasdaq’s second-largest shareholder post-transaction. Additionally, Borse Dubai has agreed to an 18-month lock-up period for its remaining shares in Nasdaq, ensuring a stable partnership and continued influence with the ability to nominate a board member as long as it retains at least a 10% stake.
The secondary offering, according to Essa Kazim, Chairman and CEO of Borse Dubai, aims to “enhance the capital structure and liquidity within the Borse Dubai Group,” emphasizing the company’s commitment to being a “long-term shareholder in Nasdaq.”
Morgan Stanley and Goldman Sachs have been named as joint lead book-running managers for this significant offering, with J.P. Morgan acting as the capital markets advisor to Nasdaq on the deal.
Borse Dubai’s relationship with Nasdaq dates back to 2008, involving a complex transaction that saw Nasdaq acquiring Borse Dubai’s stake in Sweden’s OMX. This partnership has since evolved, with Nasdaq becoming a crucial technology and brand ally for Borse Dubai’s exchange group. The two entities have cooperated on various initiatives, including a 2017 agreement to enhance the technological and post-trade capabilities of the DFM and Nasdaq Dubai.
Owned by the Investment Corporation of Dubai, Borse Dubai oversees the Dubai Financial Market and Nasdaq Dubai, playing a pivotal role in the global capital markets by leveraging technology, liquidity, and regulatory expertise. This latest financial maneuver is set to close on March 22, further cementing the strategic ties between Borse Dubai and Nasdaq, while also aiming to bolster the financial robustness and liquidity of the Borse Dubai Group.