The Swedish financial regulator Finansinspektionen (FI), has announced that it will take no further action against Borse Dubai after the Gulf-based exchange made an illegal takeover approach for Sweden's OMX exchange.
The FI said in a statement released on Thursday that Borse Dubai’s press release published on 9 August 2007 was a public takeover bid and, as a consequence, Borse Dubai has breached Sweden's Act on Takeovers in the stock market. However, the statement went on to add that Borse Dubai has subsequently complied with the Act and therefore, no further action will be taken by FI.
According to FI: "Finansinspektionen rules that the press release that Borse Dubai made public on 9 August 2007 was a public takeover bid as defined in the Act on Takeovers in the Stock Market. When Borse Dubai made the press release public it had not undertaken to follow the rules that Nordic Exchange Stockholm has stipulated for such offers. As a result, FI said that Borse Dubai had breached the law."
The Swedish regulator took action after Borse Dubai announced the purchase of a 28.4% stake in OMX on August 9.
However, FI revealed that Borse Dubai has since undertaken to follow the rules of the Nordic Exchange Stockholm. "The breach has thereby been rectified," it stated, adding: "As a result, FI will abstain from deciding upon a special charge to be paid by Borse Dubai and from deciding that Borse Dubai may not represent its shares in OMX AB."
FI noted that the objective of the rules on public takeover bids is to ensure that a bidder gives the shareholders sufficient time and information to enable them to reach a properly informed decision on the bid. "Also, false markets must not be created in such a way that the normal functioning of the markets is distorted," it ruled.
Borse Dubai has made a $4bn all-cash offer to acquire OMX, beating a $3.7 billion cash and share offer from the US technology exchange Nasdaq. The FI ruling clears the way for the Dubai exchange to proceed with its proposed takeover, but it must file a formal takeover document with the Swedish authorities by September 6 or face a maximum fine of SKR100 million (US$14 million). Borse Dubai will then be subject to a 'fit and proper' test by FI before approval for the takeover is granted.
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