Borse Dubai to sell $1.6bn stake in Nasdaq

Reuters/Brendan McDermid

State-owned Borse Dubai will sell nearly 27 million shares in the US stock exchange operator Nasdaq for $1.6 billion.

The holding company for Dubai Financial Market and Nasdaq Dubai will reduce its stake from 15.5 percent to 10.8 percent, or 62.4 million shares, making it the second largest shareholder in Nasdaq, the US bourse operator said in a statement.

In addition, the company will grant the underwriters a 30-day option to purchase up to 4,043,478 additional Nasdaq shares. If the option is exercised, Borse Dubai’s stake will decrease to nearly 10.1 percent.

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The secondary offering price has been set at $59, which is 5.5 percent lower than the stock’s closing price of $62.46 on Tuesday.

The offering is expected to close on March 22.

“The secondary offering is being conducted to enhance the capital structure and liquidity within the Borse Dubai Group,” said Essa Kazim, chairman and CEO, Borse Dubai.

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However, he said that the company will continue to be a long-term shareholder in Nasdaq.

Borse Dubai plans to agree to an 18-month lock-up of its remaining shares in Nasdaq, with a right to designate a nominee to the Nasdaq board of directors as long as it owns at least 10 percent of Nasdaq’s stake, the statement said.

“Borse Dubai’s insights and contributions have and will continue to shape our path ahead,” said Sarah Youngwood, CFO, Nasdaq.

Morgan Stanley and Goldman Sachs are joint lead book-running managers for the offering. JP Morgan is working as a capital markets advisor to Nasdaq.

Following the Borse Dubai deal, the US private equity firm Thoma Bravo will become Nasdaq’s largest shareholder, holding a 12.5 percent stake with about 71.6 million shares.