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Dubai to exit London Stock Exchange with US$2.1b sale

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Borse Dubai Ltd, the largest shareholder in London Stock Exchange Group Plc, is selling its entire stake for about 1.4 billion pounds (S$ billion), exiting an eight-year investment in Europe's oldest independent bourse.

[LONDON] Borse Dubai Ltd, the largest shareholder in London Stock Exchange Group Plc, is selling its entire stake for about 1.4 billion pounds (S$2.9 billion), exiting an eight-year investment in Europe's oldest independent bourse.

Borse Dubai's 17.4 per cent stake in the exchange is being offered at 2,250 pence to 2,300 pence per share, with demand for all the shares in that range, according to terms obtained by Bloomberg. That's a discount to the 2,538 pence closing share price in London on Wednesday.

Bank of America Merrill Lynch, Barclays Plc and Nomura Holdings Inc are managing the sale. Borse Dubai, the manager of exchanges in the Persian Gulf emirate, acquired a 28 per cent stake in the LSE from Nasdaq Stock Market Inc in 2007 as part of a deal that saw Nasdaq merge with Sweden's OMX group. LSE shares have risen 14 per cent this year.

"Borse Dubai has been a long-term shareholder and is selling its stake at a profit," said Peter Lenardos, an analyst at RBC Capital Markets. "It makes sense for them to sell shares now when the market backdrop is supportive." The Qatar Investment Authority will become the largest shareholder in the LSE once Borse Dubai's stake is sold. The Qatari authority bought a 20 per cent holding in the LSE in 2007, a stake that has shrunk to 10.3 per cent, data compiled by Bloomberg show.

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Shareholders across Europe are paring stakes in companies as investors crowd into the region amid a 16 per cent increase in the benchmark STOXX Europe 600 Index this year.

Borse Dubai previously sold a 3.1 per cent stake in LSE last September. The Dubai-based firm still owns 17 per cent of Nasdaq OMX Group Inc, according to information on its website.

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