Dubai's Dubious Dealings

Parsing the intentions of a suitor can be difficult on a first date. But Borse Dubai is learning that it pays to be a bit clearer when searching for a partner in Sweden.

Swedish regulators ruled today that Borse Dubai had violated stock-market practice when it announced plans to build an options position in the Nordic exchange, OMX AB, without broadcasting the fact that it was part of a $4 billion takeover attempt.

"Even if the press release is viewed as information of a started book-building process, it's regarded to have breached good practice on the stock market,'' explained the Swedish Securities Council in a report translated by Bloomberg.

The views of the council, a private self-regulatory body in Sweden, are just the latest to toss a bit of cold water on Borse Dubai's eager wooing of the OMX. Last month, Sweden's Financial Supervisory Authority ruled that Borse Dubai had breached the law by announcing publicly what was essentially a takeover bid prior to informing Swedish authorities.

While there is no indication that regulators will block Dubai's bid, the rulings strengthens the hand of the OMX's other suitor, Nasdaq Stock Market Inc., which has offered about $3.6 billion in its own friendlier takeover bid.

All of which is bad news for the rulers of Dubai, who have staked their country's future on becoming a world financial capital. As Eric Meyer, president and C.E.O. of U.S.-based Shariah Capital, notes, owning exchanges like the OMX, "is the ultimate feeder system of capitalism and commerce."

by Kit R. Roane