Qatar has given its clearest indication yet that it hopes to dash Borse Dubai’ OMX takeover bid. On Wednesday, the Prime Minister of Qatar, Sheikh Hamad bin Jassim bin Jabr al-Thani said on US TV that a Qatari takeover bid for OMX was being thought about “seriously”.
On Monday, the Qataris applied to OMX’s regulator, the Swedish Financial Supervisory Authority (FSA), for permission to raise their 10 per cent stake in the Nordic exchange. But as the FT reported, it wasn’t clear whether that would lead to an acquisition, or was just awkward sabre rattling.
As the good Sheikh himself put it, “there are a lot of complications”.
Borse Dubai – Qatar’s nemesis – has claims on a “50 per cent” stake in OMX, which would seem to make a Qatari takeover bid nigh on impossible. But in actual fact, Borse Dubai only holds 30 per cent of OMX equity. The remainder of it’s 50 per cent (actually 47.6) position is made up through options contracts and crucially, irrevocable offers. Which may not be so irrevocable – because those agreements are only binding so long as an offer of SKr303 per share isn’t made by another bidder. Dubai’s current bid is at SKr265.
Certainly steep to beat, but for the Qataris, possibly also a price well worth paying.
A crucial factor is Qatar’s desire to upgrade its trading platforms and make itself into a highly advanced exchange, which would lever it above Dubai to become the Gulf’s financial centre. OMX is a world leader in exchange and trading technology.
“What we are looking for is how to upgrade our systems in Qatar for our stock exchange,” using international expertise in trading technology and commodities trading, said Sheikh Hamad. “In due time we’ll announce our position.”
The history behind this is that Qatar knows it has been slow off the mark compared to its regional rivals – Dubai has, by comparison, been ruthlessly fast in expanding and diversifying its financial connections. If it misses this opportunity, then Qatar may have missed the boat altogether. With its regional rival Dubai in partnership with Nasdaq, and through them OMX, Qatar will look less and less the regional financial hub it sells itself to be.
So for both emirates, the exchange battle is becoming symbolic of the new economic orthodoxy: diversification beyond oil.
For the Sheikhs, the stakes are high.