STOCKHOLM (Dow Jones)--Shares in Nordic stock exchange operator OMX AB (OMX.SK) soared 5.7% Monday, fueled by news reports that the bourse had embarked on early talks to be taken over by the U.S. electronic bourse Nasdaq Stock Market Inc. (NDAQ).
Since Friday, the Stockholm-based company has been swept up in intensified rumors that it could be the target for a takeover as the sector is preparing for sweeping consolidation.
The Financial Times reported without quoting sources Monday that the talks with Nasdaq are "at a very early stage."
OMX declined to comment but has previously made it clear that it is closely watching the European consolidation development. With its shares at 130 Swedish kronor ($17.83), it has a market value of about SEK15.28 billion, or about $2.1 billion.
On Friday, OMX shares jumped more than 5% after news reports said that the London Stock Exchange PLC (LSE.LN) was considering a bid for the Nordic exchange.
Nasdaq currently holds a 25.1% stake in the LSE and has previously stated that it would like to own LSE in full before embarking on any further transactions. Nasdaq also declined to comment on the report.
At 1000 GMT, shares in the LSE were up 10 pence, or 0.9%, to 1,188 pence.
Michael Long, analyst at Keefe, Bruyette & Woods, said the reports could be true. "It's possible - OMX has mentioned it wants to participate in consolidation and, if Nasdaq buys LSE, then a linkup (of the three) could be likely."
He added that Nasdaq seems to want to complete its LSE transaction first, but that OMX is a valuable asset and if it isn't part of the first round of European consolidation, then it will "definitely be in the second." Long has an outperform rating on the OMX share.
Another analyst said he believed a tie-up would be unlikely, as Nasdaq has used a lot of its funds to pursue LSE and wouldn't be able to afford also going after OMX. "Nasdaq is looking at LSE and has borrowed a lot of money for that, so it doesn't have a very strong balance sheet," he said.
OMX was one of the first exchanges to talk consolidation when in August 2000 it attempted, but failed, in a GBP810 million cash-and-share bid to buy the London Stock Exchange.
In the subsequent six years, it gobbled up exchanges in Denmark, Finland, Estonia and Latvia. It has open invitations to exchanges in Norway and Iceland to enter into merger talks. Norway has so far declined the invitation, but Iceland renewed its merger talks with the operator in early August.
Company Web site: http://www.omx.com
-By Louise Nordstrom, Dow Jones Newswires; +46 8 545 130 97; firstname.lastname@example.org
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