Nasdaq and Borse Dubai Announce Launch of Secondary Offering of Nasdaq Common Stock
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Insights
The secondary offering by Borse Dubai of shares in Nasdaq represents a notable event in the financial markets, potentially influencing Nasdaq's stock liquidity and market perception. The sale of approximately 26.9 million shares, with an option for underwriters to purchase an additional 4 million shares, could lead to a dilution of existing shareholders' equity. However, since these are existing shares being sold by Borse Dubai and not new shares issued by Nasdaq, the direct impact on Nasdaq's capital structure is minimal.
Investors should monitor the market's reaction to this offering, as large block sales can sometimes pressure the stock price due to increased supply. The lock-up agreement for an 18-month period post-offering indicates Borse Dubai's commitment to remaining a significant shareholder, which may reassure investors about the stability of Nasdaq's shareholder base. The fact that Borse Dubai will retain the right to designate a nominee to the Nasdaq board, contingent on a 10% ownership threshold, ensures its continued influence on Nasdaq's strategic direction.
From a financial perspective, the transaction's relevance lies in its potential impact on Nasdaq's share price and the implications for shareholder value. Borse Dubai's decision to sell a portion of its stake may be interpreted as a move to rebalance its portfolio and enhance its own capital structure. The proceeds from the offering solely benefit Borse Dubai, which could be utilized to invest in other areas or improve its financial flexibility.
Investors and analysts should evaluate the offering's size relative to Nasdaq's average trading volume to gauge potential short-term price volatility. It's also important to consider the long-term perspective, where Borse Dubai's reduced, yet still significant, stake could alter the power dynamics within Nasdaq's shareholder meetings and influence future corporate governance decisions.
Corporate governance implications of this transaction are worth considering. Borse Dubai's ability to appoint a board member as long as it holds a 10% stake provides it with a strategic lever to influence Nasdaq's governance. This arrangement underscores the importance of significant shareholders in corporate decision-making processes.
Such corporate actions often signal confidence in the company's management and strategic vision, particularly when the selling shareholder is an industry peer and partner. However, it also raises questions about the diversification of the board's composition and potential shifts in the balance of power, especially if the underwriters exercise their option to purchase additional shares, further reducing Borse Dubai's stake.
NEW YORK and DUBAI, United Arab Emirates, March 19, 2024 (GLOBE NEWSWIRE) -- Nasdaq, Inc. (Nasdaq: NDAQ or Nasdaq) and Borse Dubai Limited (Borse Dubai) today announced the commencement of a secondary offering by Borse Dubai of 26,956,522 shares of Nasdaq’s common stock. Borse Dubai also expects to grant the underwriters a 30-day option to purchase up to 4,043,478 additional shares of Nasdaq’s common stock. The offering is subject to market and other conditions, and there can be no assurance as to whether or when the offering may be completed.
Nasdaq is not offering any shares in the offering and will not receive any proceeds from the offering. Borse Dubai will receive all of the proceeds from the offering.
At the completion of the offering, Borse Dubai is expected to hold approximately 62.4 million shares, representing approximately
Subject to completion of the offering, Borse Dubai intends to agree to an 18-month lock-up of its remaining shares controlled by Nasdaq, with a right to designate a nominee to the Nasdaq board of directors so long as it continues to own at least
“Today’s offering is being conducted to enhance the capital structure and liquidity within the Borse Dubai Group. We continue to be a long-term shareholder in Nasdaq and are invested in the success of the company,” said Essa Kazim, Chairman and CEO, Borse Dubai. “The relationship between Nasdaq and Borse Dubai is multifaceted and has spanned many years. We have not only been a shareholder in Nasdaq for the past 16 years, but Nasdaq is also a key technology and brand partner for our exchange group and we believe in the strategic vision for the company. We look forward to a continued relationship as a partner.”
“Borse Dubai is and continues to be a valued shareholder of Nasdaq underpinned by a shared vision for our future,” said Sarah Youngwood, Chief Financial Officer, Nasdaq. “Borse Dubai’s insights and contributions have and will continue to shape our path ahead.”
Morgan Stanley and Goldman Sachs & Co. LLC are acting as joint lead book-running managers for the offering. J.P. Morgan is acting as capital markets advisor to Nasdaq.
Nasdaq has filed a registration statement (including a prospectus) with the U.S. Securities and Exchange Commission (the “SEC”) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents Nasdaq has filed with the SEC for more complete information about Nasdaq and the offering. You may get these documents for free by visiting EDGAR on the SEC’s website at www.sec.gov. Alternatively, Nasdaq, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by contacting Morgan Stanley & Co. LLC, Attn: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014; or Goldman Sachs & Co. LLC, Prospectus Department, 200 West Street, New York, NY 10282, by telephone at (866) 471-2526, by facsimile at (212) 902-9316, or by email at prospectus-ny@ny.email.gs.com.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any offer or sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Nasdaq
Nasdaq (Nasdaq: NDAQ) is a leading global technology company serving corporate clients, investment managers, banks, brokers, and exchange operators as they navigate and interact with the global capital markets and the broader financial system. We aspire to deliver world-leading platforms that improve the liquidity, transparency, and integrity of the global economy. Our diverse offering of data, analytics, software, exchange capabilities, and client-centric services enables clients to optimize and execute their business vision with confidence.
About Borse Dubai
Borse Dubai was established in 2007 with the mandate of expanding Dubai's leadership in the financial markets sector. Borse Dubai is the holding company of Dubai Financial Market (DFM) and Nasdaq Dubai and holds a minority stake in Nasdaq, Inc. Borse Dubai is owned by Investment Corporation of Dubai.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking information that involves substantial risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed or implied by such statements. When used in this communication, words such as “enables”, “intends”, “will”, “can”, “expected”, “enhances” and similar expressions and any other statements that are not historical facts are intended to identify forward-looking statements. Forward-looking statements in this press release include, among other things, statements about the offering, Nasdaq’s and Borse Dubai’s respective plans, objectives, expectations and intentions and the financial condition, results of operations and business of Nasdaq. Risks and uncertainties include, among other things, risks related to the ability of Nasdaq and Borse Dubai to consummate the offering, Nasdaq’s ability to implement its strategic vision, initiatives, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors detailed in Nasdaq’s reports filed on Forms 10-K, 10-Q and 8-K and in other filings Nasdaq makes with the SEC from time to time and available at www.sec.gov. These documents are also available under the Investor Relations section of the Company’s website at http://ir.nasdaq.com/investor-relations. The forward-looking statements included in this communication are made only as of the date hereof. Nasdaq and Borse Dubai disclaim any obligation to update these forward-looking statements, except as required by law.
Nasdaq Media Relations Contact:
Marleen Geerlof
+1.347.380.3520
Marleen.Geerlof@Nasdaq.com
Nasdaq Investor Relations Contact:
Ato Garrett
+1.212.401.8737
Ato.Garrett@Nasdaq.com
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FAQ
How many shares of Nasdaq's common stock is Borse Dubai offering in the secondary offering?
What percentage of Nasdaq's outstanding shares will Borse Dubai hold post-offering?
Who will receive the proceeds from the offering of Nasdaq's common stock by Borse Dubai?
Which investment banks are acting as joint lead book-running managers for the offering?
What is the purpose of the offering by Borse Dubai?
