//Par Abdelmounaïm Mesbahi//
It is a tactical battle going on between Euronext N.V. and Nasdaq Inc. to take control of Oslo Bors, the Norwegian stock exchange. On January 14th, Euronext has announced a €625m bid to takeover Oslo Bors offering 145 NOK1 (€14.80) per share. A few days later, Nasdaq entered the game with a higher offer reaching €674m and raising the share price to 152 NOK (€15.50).
Oslo Bors is known as a strategic market place. It is one of the latest independent stock exchanges in Europe and a leader in derivative products2 for energy, shipping and seafood. It has already been approached by Nasdaq – owning other Nordic stock exchanges like Copenhagen, Helsinki, Stockholm and Reykjavik – in 2016 for an acquisition that has failed. For Euronext, buying Oslo Bors is an opportunity to bring some diversity among its market places that already count Amsterdam, Paris, Brussels, London, Lisbon and Dublin.
To understand the current situation, we need to go back to late December when Euronext started buying Oslo Bors stock from shareholders holding 21 percent of the Norwegian exchange. Before making its tender offer3 on mid-January, it managed to secure 50.5 percent of shares and commitments to sell from shareholders. Euronext CEO Stephane Boujnah claims “it is not a hostile offer4” although it has not been solicited by the board but by shareholders. Meanwhile, the Managing Board of Oslo Bors has started its own process which ended in Nasdaq making a higher offer on January 30th backed by the board and the top two holders, DNB Livsforsikring and Kommunal Landspensjonskasse.
According to Euronext CEO, the company is considering raising its offer in the upcoming days in a move to gain support from the Managing Board, even if it already secured half of Oslo Bors capital. This could be seen as a hand extended toward regulators that can still block the transaction. Many things can happen, and the decision is really up to the Ministry of Finance and Finanstilsynet5 – the financial supervisory authority. If the regulators give clearance to both Euronext and Nasdaq, the first would have to raise its offer to convince Oslo Bors board and the rest of shareholders. For Nasdaq, it would have to up its price to the level where Euronext will give up and sell what she has got. If none of it happen, shareholders backing Euronext would have to find a way to withdraw their irrevocable commitment. The problem is if any sale should be made, regulators will require that it must be total, and no blocking minority can be left aside.
This situation had a huge impact on the share price of Oslo Bors VPS Holding. It went up from 120 NOK on December 21st to 152 NOK on January 30th when Nasdaq made its bid. Today, at the moment this article is written, Oslo Bors share is selling at 159 NOK (€16,20), growing by 32% in a month.
NOK1 : code for the krone which is the Norwegian currency
Tender offer3 : “a public offer to purchase a block of stock in a corporation, often the controlling interest, within a specified period and at a stipulated price, usually well above the existing market price” – Collins Dictionary
Finanstilsynet5 : The Financial Supervisory Authority of Norway
- Euronext launches formal bid to buy Oslo Bors for €625m, Financial Times – https://www.ft.com/content/edb32606-17cb-11e9-b93e-f4351a53f1c3
- Sneaky tactics may win an M&A battle, but lose the war, Bloomberg – https://www.bloomberg.com/opinion/articles/2019-02-08/euronext-nasdaq-battle-for-control-of-oslo-bors
- Euronext lance son OPA sur la Bourse d’Oslo, Les Échos – https://www.lesechos.fr/finance-marches/marches-financiers/0600509960461-euronext-lance-son-opa-sur-la-bourse-doslo-2236058.php
- Euronext pourrait relever son offre sur la Bourse d’Oslo, Les Échos – https://www.lesechos.fr/finance-marches/marches-financiers/0600632668396-euronext-pourrait-relever-son-offre-sur-la-bourse-doslo-2241830.php?fbclid=IwAR1Hc_obI8GStV-bu89hPmh5sJxEnPKXgo0cTdmL4zUTZjbtrOw7XWZO3dE#Xtor=AD-6000
- Oslo Bors VPS Holding share price – https://www.osloborsvps.no/obvps_eng/Oslo-Boers-VPS/The-share
For further information :
- Definition of “Tender Offer”, U.S. Securities and Exchange Commission (SEC) – https://www.investor.gov/additional-resources/general-resources/glossary/tender-offer