Qatar buys 20 per cent in LSE amidst Nasdaq-Dubai deal on OMX/LSE

Mumbai: Qatar has announced the acquisition of a 20 per cent stake in London Stock Exchange even as regional rival Dubai Bourse and US electronic exchange Nasdaq unveiled a deal to buy stakes in one another ahead of Nasdaq''s acquisition of a stake in Nordic exchange OMX.

Qatar said it bought the 20 per cent stake in LSE through the Qatar Investment Authority (QIA) and urged OMX shareholders to take no action on the Dubai/Nasdaq offer. The QIA said it also bought a 9.98 per cent stake in OMX.

Separately, private equity firm Carlyle Group said is selling a 7.5 per cent stake in itself to an Abu Dhabi investment arm for $1.35 billion.

Borse Dubai, a holding company formed last month to promote investment in two Dubai exchanges, has now ended its takeover tussle with Nasdaq over OMX. Instead, it will buy 20 per cent of Nasdaq itself, making it the single-largest shareholder.

Nasdaq chief executive Bob Greifeld said he does not anticipate regulatory hurdles to the deal because Borse Dubai''s voting rights in Nasdaq will be restricted to 5 per cent.

As per the deal, Nasdaq will hold 33 per cent of the Dubai International Financial Exchange (DIFX), one of Borse Dubai''s two exchanges. Borse Dubai will use the name Nasdaq-DIFX in the Middle East, North Africa and South Asia. The two bourses also agreed to a separate joint venture in China.

Sources familiar with the matter said Citigroup, which made block trades totaling 12.8 per cent of OMX shares, was buying OMX shares in the open market on behalf of the QIA.

The QIA, which did not disclose the source of its 20 per cent LSE stake, said it would not make a full takeover offer, "but reserves its position in the event that a third party announces a firm intention to make an offer."

The LSE said it welcomed the QIA as a long-term investor. Given the development of Doha as a financial center, the shareholding presented significant opportunities, it said.

Borse Dubai Chairman Essa Kazim also said its LSE purchase was a long-term investment.

With oil and gas prices staying strong, Qatar and Dubai have been prominent global investors. Dubai has spent more than $15 billion in less than three years on foreign acquisitions, including $6.8 billion for British ports operator P&O.