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Nasdaq pulls out of Oslo Bors battle, handing Euronext victory

By Terje Solsvik
FILE PHOTO: A woman walks past the Oslo Stock Exchange building in Oslo, Norway February 12, 2019. REUTERS/Gwladys Fouche - RC1340E8A7B0/File Photo

By Terje Solsvik

OSLO (Reuters) - 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% of Oslo Bors 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 U.S. 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.

'GOOD SOLUTION'

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 U.S. company had secured backing from around 35% of owners.

Neither Oslo Bors' management, nor DNB, which holds a 20% stake, or KLP, which holds 10%, 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% higher at 0907 GMT, while those of Oslo Bors had not been traded.

($1 = 8.6855 Norwegian crowns)

(Reporting by Terje Solsvik; Editing by Edmund Blair and Alexander Smith)