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The Qatar Investment Authority is considering buying Nasdaq’s 31 per cent stake in the London Stock Exchange as a long-term strategic investment rather than a springboard for a bid, said a senior figgure familiar with the matter.
The QIA has made preliminary contact with Nasdaq to express interest in the US exchange’s stake, but the process is “at an early stage, and in fact there is no decision on whether even to put in a bid”.
Nasdaq has set a deadline of this Friday to receive expressions of interest, but has indicated that it is prepared to be flexible on timing.
“The QIA is a value-driven investor and it won’t overpay,” the person said, citing the authority’s decision to walk away from the auction for Thames Water last year.
Qatar has begun to strengthen its own securities regulatory framework in preparation for an effort to become the financial hub of the region in competition with Dubai. An LSE stake would give it a window into the operations of a European exchange that could become a model in the future.
Sovereign funds, including Singapore’s Temasek, are understood to be among other likely bidders.
Dubai officials are “confident” Borse Dubai will succeed in acquiring OMX with its Nasdaq-trumping $4bn bid. Nasdaq has denied it is selling the LSE stake to build a war chest to counter the Dubai offer and said it would have sold it in any event.
In spite of Dubai having been found guilty of a breach of securities rules in the manner it acquired a27 per cent stake in OMX, there is scepticism that it will be barred from buying the exchange on grounds that it is not “fit and proper”.
Dubai officials have denied the emirate would opt to buy Nasdaq’s LSE stake in exchange for walking away from the OMX deal.