Nasdaq withdraws offer for Oslo Stock Exchange

Nasdaq withdrew its offer for Oslo Bors on Monday, giving pan-European exchange Euronext free rein to pursue its bid for the Norwegian stock market operator after a five-month battle.

Euronext secured approval from Norway’s Ministry of Finance this month to buy more than 50 per cent of Oslo Bors (Oslo Stock Exchange) for 158 Norwegian crowns per share, effectively blocking Nasdaq’s bid. Both had valued one of Europe’s few independent stock market operators at around 6.8 billion Norwegian crowns ($783 million).

Both Euronext, which runs exchanges in Paris, Brussels, Amsterdam, Lisbon and Dublin, and Nasdaq are looking to expand their portfolios but opportunities are scarce as market operators either already belong to international groups or their shareholders want to remain independent.

With technology speeding up trading and deregulation leading to market integration, size has become an important feature for bourse operators as big data allows larger players to squeeze costs and reduce transaction fees.

The Oslo Bors acquisition is expected to diversify Euronext’s revenue from shares and derivatives trading, given the Norwegian operator’s leading position in seafood derivatives as well as oil services and shipping.

Euronext’s success blocks Nasdaq’s ambition of completing a sweep of the Nordic-Baltic region, where the US firm already owns the stock markets of Sweden, Denmark, Finland and Iceland, as well as those of Estonia, Latvia and Lithuania.

Nasdaq, which had won the support of the Norwegian market operator’s major investors DNB and KLP, said it would now release those owners from their obligations.

Norway had rejected Nasdaq’s argument that no takeover should be allowed unless a two-thirds stake was obtained, a demand that could have blocked Euronext as the US company had secured backing from around 35 per cent of owners.

Neither Oslo Bors’ management, nor DNB, which holds a 20 per cent stake, or KLP, which holds 10 per cent, had been consulted head of Euronext’s surprise Dec. 24 bid, and the three immediately began searching for an alternative bidder.

While Nasdaq entered the fray in late January, eventually driving up the bid to 158 crowns from Euronext’s initial 145 crowns offer, it was unable to overcome Euronext’s early support of more than half the Oslo Bors shareholders. DNB and KLP said they had not yet decided whether to sell their shares or not, but would meet to discuss the way forward.

“We’ve not yet decided what to do, but we hope to find a good solution with Euronext,” DNB spokesman Thomas Midteide said, while a spokeswoman for KLP said the pension provider would coordinate its approach with DNB.

Euronext has said it aims to complete its transaction by the end of June, and to appoint the Oslo Bors chief executive to its managing board. It also promised to set up a hub in the Norwegian capital to supervise commodities transactions. Shares in Euronext moved 0.1 per cent higher at 0907 GMT, while those of Oslo Bors had not been traded.

Meanwhile the Norway’s DNB will meet with Euronext before deciding whether to sell its 20 per cent stake in Oslo Bors VPS to the pan-European stock market operator, the bank said on Monday.

DNB will also hold talks with other Oslo Bors shareholders in the hope of finding a “good solution” for the Norwegian stock exchange, it added.

Nasdaq withdrew its bid for the Oslo Bors on Monday, leaving Euronext as the sole bidder.

Oslo Stock Exchange (Norwegian: Oslo Bors) is the only independent stock exchange within the Nordic countries and offers Norway’s only regulated markets for securities trading today. The stock exchange offers a full product range including equities, derivatives and fixed income instruments.

The Euronext consortium of European stock exchanges is expected to purchase Oslo Stock Exchange in 2019. By convention, the new formal name of the exchange would be Euronext Oslo.

Oslo Bors is today an online market place where all trading is done through computer networks. Trading starts at 09:00am and ends at 04:30pm local time (CET) on all days of the week except weekends and holidays declared by Oslo Bors in advance.

There are three markets for listing and trading on the stock exchange: Oslo Børs is the largest market place for listing and trading in equities, equity certificates, ETPs (exchange traded funds and notes), derivatives and fixed income products. Established in 1819, first as an commodity exchange. Equities and bonds listed and traded from 1881.

Oslo Axess was established in May 2007 as an alternative to Oslo Bors for listing and trading in shares. Nordic ABM was established in June 2005 as an alternative bond market.

Reuters