Tug-of-war over Oslo Børs could reframe Nordic governance
Oslo Børs is the last independent stock exchange in the Nordics, owned by several institutional investors since its privatisation in 2001. However, this might be about to change, as a bidding war has emerged between Euronext and Nasdaq. Negotiations remain ongoing, with both sides claiming support for their bid from a substantial portion of the share registry.
Oslo, Norway – August 27, 2018: Stock exchange building in Oslo, Norway
Historically, there have been similarities in corporate governance among the Nordic countries, both in terms of legislation and other regulation. A takeover by Nasdaq could further align Oslo Børs’ corporate governance practices with those of its Nordic peers: since Nasdaq already operates the stock exchanges in Helsinki, Stockholm, Copenhagen and Reykjavik, the entire region could end up with similar listing and disclosure rules.
On the other hand, an acquisition by Euronext could bring the Oslo Børs closer to its pan-European counterparts, such as the Euronext-owned exchanges in Amsterdam and Paris. A potential implication could be moving Norwegian corporate governance practices closer to the larger European markets.
In previous consolidations, the biggest exchange often becomes the centre, with the most important functions of the exchange and market activity concentrated around it. This has led to weakening of the smaller exchanges in the partnership, causing reductions in business activity and international visibility. This especially disfavours smaller listed companies.
Take, for example, the Euronext-owned Paris, Amsterdam and Brussels exchanges. Listing activity has decreased significantly in Belgium and the Netherlands, while Paris has seen a significant increase. The creation of the OMX-group had similar effects. The capital markets in Denmark and Finland saw less IPOs after the consolidation, while the number of IPOs in Stockholm increased in the same period.
As competing offers continue to roll in, Oslo Børs shareholders are already paying close attention. However the potential implications for the infrastructure of the Norwegian capital markets makes this a negotiation worth following even without a direct interest in the deal itself.
Quttab-Udin is an analyst covering the Nordic markets.
© 2020 Glass, Lewis & Co., and/or its affiliates. All Rights Reserved.
This blog is for informational purposes only and is updated periodically to keep Glass Lewis' clients and other interested parties informed of current corporate governance developments and regulatory trends. The information contained herein should not be construed as legal or investment advice. Glass Lewis analyzes issues it believes may be of interest to its subscribers and makes recommendations as to how Glass Lewis believes institutional shareholders should approach such issues. While Glass Lewis may mention certain companies in its blog postings, Glass Lewis never comments on the investment merits of the securities issued by the subject companies. Therefore, none of the information posted through this blog should be construed as a recommendation to invest in, purchase, or sell any securities or other property. All recommendations stated herein must be construed solely as statements of opinion, and not as statements of fact, and may be revised based on additional information or any other reason at any time.
The information contained in each blog posting is based on publicly available information. While Glass Lewis exercises reasonable care to ensure that all information included in this blog is accurate and is obtained from sources believed to be reliable, no representations or warranties express or implied, are made as to the accuracy or completeness of any information included herein. In addition, Glass Lewis shall not be liable for any losses or damages arising from or in connection with the information contained herein or the use or inability to use any such information.
Glass Lewis expects readers of its blog possess sufficient experience and knowledge to make their own decisions entirely independent of any information contained in Glass Lewis’ blog postings. Subscribers are ultimately and solely responsible for making their own decisions. This blog is intended to serve as a complementary source of information and analysis for subscribers in making their own decisions and therefore should not be relied on by subscribers as the sole determinant in making decisions.