LONDON (Reuters) - Borse Dubai [BRSDB.UL], the biggest investor in the London Stock Exchange is selling its stake in the British exchange, which will raise around 1.5 billion pounds ($2.23 billion).
The sale of the 17.4 percent holding by the biggest single shareholder in the LSE will take place via a so-called accelerated book building process, a source familiar with the situation told Reuters on Wednesday.
Borse Dubai, which was not immediately available for comment, is the holding company for Dubai Financial Market (DFM) and Nasdaq Dubai. It was formed in August 2007 to consolidate the government of Dubai’s two stock exchanges as well as its investments in other exchanges such as the LSE.
The Dubai exchange became a major shareholder in Nasdaq in a complex deal in 2007, buying a 28 percent stake in the LSE from the U.S. exchange for 1,414 pence per share.
Borse Dubai has since reduced its LSE stake and in September last year sold around 3.1 percent of the London exchange. At the time it said it had “no current intention to sell any further shares” and it remained “a long-term supportive shareholder”.
Shares in the LSE have risen since then and closed on Wednesday at 2,538 pence, valuing the Borse Dubai shareholding at around 1.5 billion pounds.
Borse Dubai’s exit will leave Qatar Investment Authority (QIA) as the biggest shareholder in the LSE with a 10.3 percent stake.
Bank of America Merrill Lynch, Barclays and Nomura are working as joint bookrunners on the stake sale, the source told Reuters on condition of anonymity, adding that there had already been sufficient demand for the shares to “cover the books”, which means that the banks carrying out the sale should not be left holding unwanted stock.
($1 = 0.6717 pounds)
Additional reporting by Sophie Sassard and Sudip Kar-Gupta; Writing by Alexander Smith; editing by Susan Thomas