Nordic and Baltic market operator OMX has signed a letter of intent to acquire Eignarhaldsfelagid Verdbrefathing hf (EV), the owner of Iceland Stock Exchange (ICEX) and Icelandic Securities Depository (ISD), in an all share deal worth SKr250 million.
Under the proposed transaction, EV shareholders will be offered 2.07 million newly issued shares in OMX. The deal values the Icelandic firm at IKr2.450m (SKr 250m) excluding surplus cash and marketable securities.
Based on EV's balance sheet as of 30 June 2006, surplus cash and marketable securities are approximately IKr570m, which will be disbursed to EV shareholders prior to closing.
OMX said in August that it was in merger dicussions with the Iceland exchange. The two firms previously broke off talks in November last year after the Icex board failed to reach a unanimous decision on a potential merger with the Swedish bourse operator.
But in today's statement, OMX says it expects to sign a formal merger agreement with EV before the end of October and the transaction is expected to close before the end of the year.
Commenting on the deal, Jukka Ruuska, president, business area Nordic marketplaces, OMX, says: "We are creating an integrated Nordic home market to increase intra-Nordic trading and improve the attractiveness to international investors. It is very encouraging to contribute to the increased visibility of Icelandic companies as they will join the common Nordic list, OMX's information services and OMX-wide indices."
OMX says the merger will also increase developement of the Faroese Securities Market (Virðisbrævamarknaður Føroya or VMF), which is operated by ICEX. Furthermore, Icex's alternative market iSEC, which is the second largest European alternative market in number of companies, will be rebranded First North.