OM plans £350m rights issue to fund raised offer for LSE

Om Gruppen, the Swedish Stock Exchange operator, is planning a rights issue of up to £350m, or 17 per cent of its current market capitalisation of 30.6bn kronor (£2.1bn), to fund its raised offer for the London Stock Exchange.

Om Gruppen, the Swedish Stock Exchange operator, is planning a rights issue of up to £350m, or 17 per cent of its current market capitalisation of 30.6bn kronor (£2.1bn), to fund its raised offer for the London Stock Exchange.

Plans for the issue, which will be launched "as soon as possible after the offer has become or is declared unconditional in all respects", were disclosed in the revised offer document that was posted to LSE shareholders late on Friday night.

However, no mention was made of the rights issue in the regulatory news announcement to the London Stock Exchange on Friday morning detailing the improved bid terms. Its first mention in the document is on the fourth line of page 23 which, by way of explanation, refers shareholders on to a paragraph 10 on page 25.

There readers will find, if they get down to the second sub-paragraph, that it is stated that the cash alternative will be financed initially by bank borrowings, but these will be refinanced as soon as possible through a "refinancing issue".

The document goes on to state that the rights issue has been approved by 35 per cent of OM's shareholder base, who have agreed to take up the shares. However, Olof Stenhammar, the chairman of OM Gruppen, will only take up 1 per cent. He currently owns 4.2 per cent.

The document does not state how the price for the new shares will be calculated. However, LSE shareholders will receive their OM shares ex-rights.

A complex formula has been devised whereby they will receive extra shares to compensate them. The size of the rights issue will depend on how many LSE shareholders opt for the cash alternative of £20 and half an OM share, although given the low level of acceptances that may be academic.

OM, headed by chief executive Per Larsson, confirmed yesterday it had received no further acceptances since the first closing date on 3 October, when it had received acceptances in respect of 1 per cent of LSE shares.

OM shares rose 9.5 kronor to 364.5 kronor yesterday.