Sheikdom Shakedown: Dubai moves on Nasdaq - Arab ownership of U.S. stock exchange raises flag in Congress
In a complex set of transactions, Dubai is moving to acquire 19.9 percent of the Nasdaq in New York, placing the Arab government in an ownership position of the key U.S. stock exchange and raising concerns in Congress.
As a result of the transaction, Dubai also will acquire 28 percent of the London Stock Exchange, one of the oldest and largest in the world.
The transaction is being made through Borse Dubai, a holding company 100-percent owned by the government of the Emirate of Dubai and controlled by Mohammed bin Rashid al-Maktoum, the head of the Dubai ruling family.
According to its website, Borse Dubai was created Aug. 6 as the holding company for Dubai Financial Market and Dubai International Financial Exchange in a move to consolidate the Dubai government's two stock exchanges "as well as current investments in other exchanges, expanding Dubai's position as a global capital market hub."
Arab Rivals Gear Up for Struggle Over London Stock Exchange
A bewildering flurry of deals between world stock exchanges has left two Gulf kingdoms with a near-50 percent stake in the London Stock Exchange between them.
Qatar had made a firm offer at £14 a share for most of the 31 percent stake in the LSE held by Nasdaq, the New York exchange, and was expected to succeed. But as part of a complex deal between Nasdaq and the Borse Dubai, 28 percent of the LSE was instead sold to Dubai.
The Qataris responded swiftly, agreeing to take almost 21 percent of the LSE from two US funds, including the corporate raider Samuel Heyman, in an apparent spoiler to any hostile takeover bid for London from Dubai.
The LSE welcomed the arrival of the Qataris “as a long-term investor”. Significantly, no such announcement was made about Dubai.
The Dubai/Nasdaq deal stemmed from rival bids by both for another operator of world exchanges, OMX in Stockholm. The two have made common cause and agreed that while the Dubai offer, the higher of the two, will go ahead, any shares acquired, including the 28 percent already held as a result of a market raid next month, will go to Nasdaq.
Carlyle sells stake to Abu Dhabi
Carlyle agreed on Thursday to sell a 7.5 per cent stake in itself to an arm of Abu Dhabi’s government – the latest US private equity group to bring in a sovereign wealth fund as a big investor.
Blackstone sold a near 10 per cent stake in its management company to the Chinese government in May. A different arm of the Abu Dhabi government bought a stake in Apollo Management in July. Selling stakes to international sovereign wealth funds has become a popular way for US buy-out groups to cash in on their booming businesses while expanding their influence in new markets. The Carlyle deal demonstrates that the credit squeeze has not halted such transactions.
Mubadala, the arm of Abu Dhabi which has invested in sectors as diverse as Libyan oil exploration and Ferrari, the Italian motor company, is paying $1.35bn for the Carlyle stake.
The deal was struck at a 10 per cent discount to a valuation of $20bn for all of Carlyle. The Washington-based buy-out group agreed to guarantee a floor to Mubadala’s investment, pledging to compensate the arm of the oil-rich emirate if Carlyle goes public and the share price drops.
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