Martin Waller
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A bewildering flurry of deals between world stock exchanges has left two Gulf kingdoms with a near-50 per cent stake in the London Stock Exchange (LSE) between them.
Qatar had made a firm offer at £14 a share for most of the 31 per cent 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 per cent of the LSE was instead sold to Dubai.
The Qataris responded swiftly, agreeing to take almost 21 per cent 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 per cent already held as a result of a market raid next month, will go to Nasdaq.
For London, what had seemed a secure future with a supportive 30 per cent shareholder in the Qataris is now much more uncertain.
Dubai is expected to at least consider a full bid for the LSE, whose shares leapt £2.34p to £16.87. This is significantly above the £15.85 the Qataris paid for their stake and suggests the market is expecting a takeover battle.
Last night, in yet another apparent spoiling move, the Qataris sent Citigroup on a raid into the market in Stockholm to sweep up a near10 per cent stake in OMX.
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mike ryan, christchurch, u.k. wrote, "why not ? poetic juctice !"
I have a feeling that mike will think it neither poetic nor justice if it starts to affect him directly.
Jim C., Chicago, USA
I am surprised at the prejudice displayed by others on this iusse. Many Arab investors have proved to be far more reliable partners than Western investors. After all that has taken place, who in their right mind would prefer the Nasdaq to Quatar as a major shareholder? And if you want to stop Arab money taking over the world, sell your 4X4 and walk to work!
David Scott, Loughborough,
Its funny how particular how muslims are in insisting upon Sharia Laws but are happy to purchase control over our stock exchanges which are definitely not halal.
It is extremely dangerous to allow such an ownership they could undermine our financial systems overnight - strange that it seems to be going through on the nod.
After centuries of struggle against the rise of Islam we are sliding into an islamised state and no-one seems concerned.
I fear my generation will be the last free people of Europe.
Geoff Miller, Brittany, France
why not ? poetic juctice !
mike ryan, christchurch, u.k.
Sheikh Mohammed is a good man, just look at what he has done with his country - he has turned it from a fishing village into a blooming business hub. Hopefully he can inject some of his foresight into ours.
Jo, Cambridge,
Dubai's Financial market, is riddled with cronyism and insider trading.....Just ask the "several" top guys (non Arabs)....now long sacked, for having the tumerity to ask awkward questions.
The LSE shouldn't be bought by the highest bidder....is nothing sacred in this Country anymore?
Samantha, London, England
it is not about arabs nor westerns. business is global now . you can't know for sure the identitiy of many organizations these days. the trends is acquiring stock exchanges . Nasdaq , Qatar and Dubai are just a head of the others
ahmed alzahrani, London, UK
I donât believe in conspiracies and as a free man I can only live in democracy and capitalism, that makes me very protective of the place where I live. I do believe in projects though and not all of them can be of my interest. The question I have raised remains. The LSE have fought in-numerous bids from American and European interests that wanted either to acquire a foothold in Europe or to consolidate the European Market. Deutsch Bourse tried it twice and only failed, as far as I can remember, due to internal political disagreements and now, after all of that, LSE easily goes to Arab interests, without a struggle, nothing, as if it was business as usual, a done deal, and as if it was powerless to keep it from been sold away. What I want to understand is what it is, exactly, that Dubai and the Qataris can offer, all of a sudden, that neither Deutsch Bourse nor NASDAQ could offer in years of struggle. I honestly think that there is more at play then the âinvisible handâ of Adam Smith.
Fabio C, London, UK
I must add one more thing: I have just see an article which indicates that the independence of the LSE, and so it's character, is safe and that further consolidation yet to come will change the panorama of European Bourses even further. Taking that into consideration I believe is too early to make judgements. The point here is: I think that Europe should remain a prime economic, financial, cultural center and a reference to the world, as it has been for the last 2500 years. I do not want to see that diluted for the sake of PC and as a free man living in a free and democratic society, I have the right to say so. Globalisation is good and evolution for the common good is even better, but my identity and character are in-negotiable.
Fabio C, London, UK
To those hostile to an Arab takeover of the LSE....I am dumbfounded by the stupidity of your arguments and vision so obscure to see the borderless nature of the world!
competition is good for economies and should be welcome whether it is from Indians, Arabs or else.
Stop the stereotyping and get a life.
Mohammed, London, UK
As far as I can remember the previous bids had a fair price. The only reason why they weren't successfull was because of politics inside the board of directors. Now, what is it that the Arabes can offer that Frankfurt and Nasdaq were never able to?
Fabio C, London, UK
Moreover: "The UK's open attitude to foreign investment is one of the reasons the UK is one of the strongest economies in Europe".
Taking that into consideration, the question can also be: How much does your country cost?
Fabio C, London, UK
We, in the USA, almost had the disaster of the so-called
Dubai ports deal, in which the security of a half dozen
of our ports would have fallen into Arab hands. Our
government told us there was no chance that the new owners
would use their control of the ports as an open gateway to
bring nuclear weapons in shipping containers into the USA.
They knew that because they'd asked 'em.
Fortunately, grassroots common sense caused a rebellion
strong enough to get the whole deal voted down.
This has all the same warning bells attached to it. As an
outsider, I wouldn't dream of telling you how to run your country,
except to note that it is often easier not to sign on the dotted
line than rectify your error afterwards.
Dave M., london, USA / UK
Why the anti-Arab attitude? Do you think they want to buy the LSE to then destroy it? They know the petrodollars won't last forever, and they're investing outside of petroleum. Willingness to take a big stake in LSE is a sign of confidence in the UK and in London as a financial center. If "Arabs" want to pay the shareholders of LSE a big price to own it, why should shareholders be denied the opportunity to consider it? The UK's open attitude to foreign investment is one of the reasons the UK is one of the strongest economies in Europe. The protectionist attitude of countries like France is why the unemployment rate is so high there. Best to stop interfering in Adam Smith's "Invisible Hand."
John DeMasi, London, UK
This is really interesting. The LSE has fought bids from European and American interests from a few years now and all of it to finally get into the hands of the Arabs. Wouldnât it be better to stay in Western hands? Is this a premonition of the future awaiting for us?
Fabio C, London, UK
The LSE must NEVER get into Arab hands ever.
Think about it please.
maggie millington, Brittany, France