By Agency Reporter

Wednesday, 16 Feb 2011

Borse Dubai has not been asked to reduce its stake in London Stock Exchange to facilitate a merger between the LSE and the Toronto share market operator TMX, a source familiar with the matter told Reuters on Tuesday.

Borse Dubai, which holds a 20.6 per cent stake in the LSE and is owned by the ruler of the Gulf Arab emirate, will become the single largest shareholder in the merged entity, with an 11.3 per cent stake if the deal is completed.

The proposed deal between the two exchanges has run into foreign ownership concerns in Canada, which plans to review the deal under the terms of the Investment Canada Act.

“Borse Dubai hasn’t been asked by any party to trim its stake in LSE,” the source said, speaking on condition of anonymity.

The Qatar Investment Authority owns a 15 per cent stake in LSE and the two combined will end up with a roughly 20 per cent position in the new combined company.

Ontario’s finance minister last week voiced concern about the ownership issue, saying the exchange was a strategic asset.

“We do business with the Middle East,” Mr. Dwight Duncan was quoted as saying.

“I am just not sure I want them owning our stock exchange.”

On Tuesday, a UAE newspaper said Borse Dubai would consider selling down its stake in order to reduce its ownership in the joint exchange to less than 10 per cent, citing a senior but unnamed Borse Dubai official.

Source: Punch