THE LONDON Stock Exchange’s biggest shareholder is selling its entire stake in the company.
Borse Dubai, the holding company for both of Dubai’s stock exchanges, is giving up its 17.4 per cent holding in the London exchange, in an accelerated book building process that will raise around £1.5bn.
The company first reduced its stake in the London Stock Exchange Group (LSEG) in September last year, when it sold 8.5m shares in the public market, representing a 3.1 per cent of the exchange’s share capital.
The proceeds of the deal, which was also conducted by carrying out an accelerated bookbuild, were used to subscribe to a rights issue carried out by the LSEG ahead of an acquisition of US investment group Frank Russell.
At the time of the transaction, Borse Dubai said it had no current intention to sell any further shares in the company, and added that it remained a “long- term supportive shareholder”.
Borse Dubai’s exit will leave Qatar Investment Authority as the LSEG’s biggest shareholder with a 10.3 per cent stake. The sovereign wealth fund originally bought a 20 per cent portion of the company, but has since cut down its holding, most recently selling a 4.83 per cent stake in the group in July last year.
Bank of America Merrill Lynch, Barclays and Nomura are working as joint bookrunners on the stake sale. According to reports, the banks expect to cover the books.
Borse Dubai was created in 2007, in a consolidation of the Dubai government’s two stock exchanges as well as current investments in other exchanges.
The group holds a 17 per cent stake in Nasdaq and a 79.63 per cent stake in the Dubai Financial Market (DFM). The DFM in turn holds 66.67 per cent of Nasdaq Dubai, with the remaining shares owned by Borse Dubai.
In late 2010, Borse Dubai was reported to be in talks to sell its then 20 per cent stake in the LSEG to neighbouring Abu Dhabi.
Both the London Stock Exchange and Borse Dubai declined to comment yesterday.