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Nasdaq Up on Deal Talk

A rival bid for OMX could lead to a Nasdaq buyout.



shares surged 6% as investors speculated that the U.S. stock market operator could be in play.

Borse Dubai, formed this week by the Dubai government to pool its stakes in the Dubai Financial Market and the Dubai International Financial Exchange, is looking to buy at least 25% of OMX, a Nordic exchange operator, at 230 crowns a share. Nasdaq agreed in May to pay 208 crowns a share in a $3.7 billion takeover of OMX, which operates stock exchanges in Helsinki, Copenhagen, Stockholm, Iceland, Tallinn, Riga and Vilnius.

Nasdaq urged OMX shareholders not to take action on the Dubai bid. But its shares rose $1.67 to $33.15 as observers speculated that the OMX-Nasdaq deal could be scrapped in favor of a larger deal.

"You could read it as a derailment of the OMX purchase, but maybe it opens the door for three-way talks instead of just two-way talks," says Adam Sussman, an analyst at Tabb Group. "Maybe investors are thinking that this becomes a triumvirate -- that all three of them get together in one happy family."

A three-way deal would also put Nasdaq in a better position to once again go after the London Stock Exchange next year.

Nasdaq has had a difficult time joining the exchange consolidation fever. Its archrival, the

New York Stock Exchange

, partnered with European exchange behemoth Euronext this spring, creating

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NYSE Euronext



Nasdaq, meanwhile, was failing in a $5.3 billion bid to purchase the London Stock Exchange. The deal fell apart in February as LSE management remained resistant to the idea of a deal. Under British law, Nasdaq has to wait one year before it can attempt to acquire the exchange again.

Nasdaq still owns about 30% of the LSE shares. CEO Bob Greifeld has repeatedly said Nasdaq would be "opportunistic" about its stake.

Further complicating Nasdaq's overseas expansion is the London exchange's planned acquisition of Borsa Italiana. Shareholders of the LSE, including Nasdaq, have approved the deal.

The LSE-Italian exchange linkup is likely to make it more difficult for Nasdaq to take another crack at the LSE, especially if it doesn't have much of a grounding in Europe.

In a statement on Thursday, Nasdaq acknowledged the offer by Borse Dubai, but said it remained "fully committed to its recommended offer for 100% of OMX."

"The combination of Nasdaq and OMX will provide significant benefits for customers, shareholders and stakeholders in both companies, strengthen the Nordic region as a financial center and provide enhanced opportunities for economic growth throughout the Nordic region," Nasdaq said.

"The Nasdaq offer includes a substantial portion of Nasdaq shares, providing shareholders the opportunity to benefit from the long-term value creation opportunity of the combined group, which brings together two companies with a common culture and vision of innovation, competitiveness and pioneering technology expertise," it added.