Soros close to buying 4% in BSE

Billioner US investor Geroge Soros is in final stages of acquiring close to four per cent in the Bombay Stock Exchange (BSE), Asia’s oldest bourse, from the embattled Dubai Financial Group LLC. Soros has bid around Rs 370 per share, valuing the exchange at nearly $1 billion. The stake will be picked up by Soros Fund Management LLC.

George Kaiser, the richest US philinthropist, and private equity fund Argonaut were also in race for the stake.

Dubai Financial, part of sovereign fund Dubai Holding, holds 3.92 per cent in BSE, which it bought when the exchange was demutualised in 2007. BSE was then valued at Rs 3,780 crore. While BSE and Avendus could not be reached for comment, sources familiar with the developments said Dubai Financial felt the exchange deserved a higher valuation in the current situation.

The valuation of the exchange saw a sudden spurt after a new management took over in 2009. While some stock brokers sold BSE shares around Rs 180 a piece six months ago, a bank auctioned 0.27 million shares at Rs 320 per share a couple of months ago.

Dubai Holding, which spans financial investments, hospitality and real estate, is estimated to hold around $15 billion in debt.

Dubai Holding Commercial Operations Group (DHCOG), a unit of Dubai Holding owned by the Gulf Arab emirate’s ruler, said in June it might sell assets following its $6.2 billion loss in June.

DEAL STREET

# Soros will buy stake from the Dubai Financial Group

# He has bid around Rs 370 for each share, valuing the exchange at around $1 billion

# The valuation saw a sudden spurt after a new management took over in 2009

# Among others, George Kaiser, the richest US philinthropist, and a private equity fund Argonaut were also in the race to acquire the stake

Meanwhile, BSE has launched Sensex and single stock options on its trading system, BOLT. Earlier, the options were traded on a different system, known as DTSS, which was causing inconvenience to brokers. The exchange also announced today that Keki Mistry vice-chairman & chief executive of Housing Development Finance Corporation Limited, has joined its board. Mistry is the third high-profile director to join BSE in the past couple of months after S Ramadorai, non-executive chairman of Tata Consultancy Services Ltd and Andreas Preuss of Deutsche Bourse.