Feb. 17 (Bloomberg) -- Borse Dubai Ltd., the biggest shareholder in London Stock Exchange Group Plc, said it agreed to buy Qatar's stake in OMX AB and would consider an offer from its Gulf neighbor to sell shares in the London bourse.

State-owned Borse Dubai, which with Nasdaq Stock Market Inc. plans to buy Nordic exchange company OMX, would ``certainly'' consider an offer from the Qatar Investment Authority for its stake in LSE though it hasn't been asked to sell, Chairman Essa Kazim told reporters today.

``There was no deal whatsoever'' on Borse Dubai's LSE shares when Qatar offered Dubai its 9.98 percent holding in Stockholm- based OMX, Kazim said.

Borse Dubai on Feb. 15 said it built a 97.6 percent holding in OMX through shares and options, giving it enough ownership to complete a $4.9 billion deal struck with Nasdaq in September in which it agreed to buy OMX then give it to Nasdaq in return for almost 20 percent of Nasdaq and 28 percent of LSE. Qatar threatened to scupper the deal as soon as it was announced, buying a rival OMX stake and 20 percent of London's bourse, forcing Dubai to increase its OMX offer.

Borse Dubai now owns 20.4 percent of LSE, 5 percent more than Qatar's holding, data compiled by Bloomberg show. Their holdings were diluted when LSE on Oct. 1 completed its takeover of Borsa Italiana SpA for 1.63 billion euros ($2.39 billion) in shares.

`Misunderstanding'

There was a ``misunderstanding'' with Dubai over European exchange holdings that has now been ``sorted out,'' Qatar Prime Minister Sheikh Hamad bin Jasim bin Jaber al-Thani said in an interview last month. Qatar's role in OMX is ``over,'' he said.

Qatar sold its entire OMX holding, Sweden's stock market regulator said in a Feb. 13 statement, without identifying the buyer. Kenneth Shen, head of strategic and private equity for the Qatar Investment Authority, which manages $60 billion for the state according to Citigroup Inc. estimates, didn't answer a call to his mobile phone today seeking comment.

``Selling LSE shares is not in our short-term horizon,'' Borse Dubai Vice-Chairman Soud Ba'alawy said today. ``LSE is performing excellently,'' Kazim said.

LSE shares fell 2.8 percent to 1,647 pence on Feb. 15, and the stock has fallen 17 percent this year.

As part of the Dubai-Nasdaq agreement, Nasdaq also gets a third of the Dubai International Financial Exchange, or DIFX, which will be rebranded as a Nasdaq venture. Dubai started the DIFX in 2005 to be the Gulf's first bourse open to issuers and investors of any nationality as it vies with neighbors Qatar and Bahrain to be the region's financial hub.

Listings

The exchange has since attracted common-stock listings of nine companies, and in May Chief Executive Officer Per E. Larsson said it needs ``flagship'' listings to spur investor interest.

Dubai-owned DP World Ltd. raised $4.96 billion in November through the Middle East's biggest IPO before listing its shares on the bourse. The stock has fallen by 27 percent this year, and on Feb. 15 New York-based NanoDynamics Inc. said it canceled plans to list on the DIFX, without giving a reason why.

``Adding Nasdaq to the DIFX is not a sign that the DIFX didn't work, but that we want to exploit the trend of capital moving between east and west,'' said Ba'alawy, who as executive chairman of Dubai Group manages more than $40 billion for Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum.

The partners will attract companies from ``as far as the former Soviet Union to the borders of China'' seeking to tap the Gulf's soaring oil wealth, Kazim said.

Six banks including HSBC Holdings Plc, Goldman Sachs Group Inc. and Citigroup Inc. will start meetings with other potential lenders next week to help Borse Dubai get a $4.2 billion loan for its OMX acquisition, Mukhtar Hussain, HSBC's global head of principal investments, told reporters.

To contact the reporters on this story: Will McSheehy in Dubai at wmcsheehy@bloomberg.net; Matthew Brown in Dubai at mbrown42@bloomberg.net

Last Updated: February 17, 2008 09:58 EST