Borse Dubai, the holding company of Dubai Financial Market (DFM), plans to sell approximately one-third of its stake in Nasdaq, the New York-based exchange operator, for $1.59 billion.
According to a stock exchange filing made by Borse Dubai, the Dubai-based company intends to sell around 27 million shares at a price of $59 per share in a secondary offering.
Underwriters will have a 30-day option to purchase up to four million additional Nasdaq shares.
The completion of the transaction is subject to market conditions, and the company did not specify a timeline for the conclusion of the secondary offering.
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Proceeds from the secondary offering will be received entirely by Borse Dubai. After the deal is finalized, Borse Dubai is expected to retain approximately 62.4 million shares, representing 10.8 percent of Nasdaq. However, if the underwriters exercise their option to buy additional shares in full, Borse Dubai’s shareholding in the exchange operator will decrease to 10.1 percent, or around 58.3 million shares. The company stated that upon completion of the offering, it is projected to become the second-largest shareholder in Nasdaq.
Additionally, Borse Dubai plans to impose an 18-month lock-up period on its remaining stake in Nasdaq, during which it will have the right to designate a nominee to the Nasdaq board.
Enhancing capital structure and liquidity
The primary purpose of the offering, according to Essa Kazim, chairman and chief executive of Borse Dubai, is to enhance the capital structure and liquidity within the Borse Dubai Group. Moreover, Kazim highlighted that the company remains a long-term shareholder in Nasdaq and is committed to its success.
Morgan Stanley and Goldman Sachs are serving as joint lead book-running managers for the offering, while JP Morgan is acting as the capital markets adviser to Nasdaq for this transaction.
Borse Dubai initially invested in Nasdaq back in 2008 as part of a complex arrangement in which Nasdaq acquired Borse Dubai’s shareholding in Sweden’s OMX.
In 2017, Borse Dubai and Nasdaq also announced a partnership aimed at strengthening the technological infrastructure of the Dubai Financial Market (DFM) and Nasdaq Dubai, as well as improving post-trade practices on both exchanges in the emirate.
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