CORRECTED-UPDATE 2-Nasdaq OMX in big share buyback; stock soars

(Corrects 7th and 8th paragraphs to make clear Borse Dubai
retains a stake in Nasdaq OMX and is not selling its entire
stake)

* Buying 22.8 mln shares from Borse Dubai for $497 mln

* Buyback to be funded by $370 mln bond sale

* Stock up 6 pct
(Adds background on stake, share and options reaction, Borse
Dubai-Investor AB deal, byline; adds CHICAGO to dateline)

By Jonathan Spicer and Doris Frankel

NEW YORK/CHICAGO, Dec 16 (BestGrowthStock) – Exchange operator
Nasdaq OMX Group Inc (NDAQ.O: ) kicked its buyback plan into high
gear with a deal to repurchase 11.5 percent of its outstanding
shares from Borse Dubai for $497 million, sending its stock up
6 percent.

The repurchase of 22.8 million shares will be funded by a
proposed $370 million bond sale, the U.S.-based company said on
Thursday.

The news boosted Nasdaq OMX shares to their highest levels
in nearly two years, while options traders turned very bullish
on the company.

Nasdaq OMX said it agreed to a price of $21.82 per share
for the buyback, below its closing price of $22.53 on
Wednesday.

“This transaction allows Nasdaq OMX to reduce their share
count at an inexpensive price,” said David Russell, an analyst
at Chicago-based Web information site optionMonster.com.

The deal will help Borse Dubai meet its debt obligations,
Nasdaq OMX said.

It said Borse Dubai would also sell about 8 million Nasdaq
OMX shares to Investor AB (INVEb.ST: ), the holding company for
Sweden’s Wallenberg family.

After the transactions with Nasdaq OMX and Investor AB,
Borse Dubai’s holdings in Nasdaq OMX will total about 30
million shares.

The plan “allows us to be opportunistic and accelerate our
share repurchase plans,” Nasdaq OMX Chief Executive Robert
Greifeld said in a statement. “The financing gives us
sufficient capacity to fund the buyback while maintaining
strategic and operational flexibility.”

SHARES JUMP

Nasdaq OMX said its proposed bond sale would depend on
market conditions.

The company, which runs stock and options markets in the
United States and a handful of Nordic countries, said it was
committed to maintaining an investment-grade status with
ratings agencies S&P and Moody’s.

Nasdaq OMX shares logged their biggest intraday gain in
months, rising as much as $1.65 to $24.18 in morning trading.
They were up $1.38 to $23.91 at midday.

The deal with Borse Dubai comes less than two months after
Nasdaq OMX increased its share repurchase plan by $150 million
to $550 million. [ID:nN29290855]

Nasdaq OMX option volume was 6.1 times greater than average
daily levels, with 4,878 calls and 557 puts traded by 10:45
a.m. (1545 GMT), according to data from options analytics firm
Trade Alert. Directional sentiment based on option order flow
was 67 percent bullish, the data showed.

“Options traders are looking for the stock to rally toward
$25 level over the next five weeks,” Russell said, adding that
the stock broke a technical resistance level at $23.20.

To speculate on potential share price appreciation,
investors often use equity call options that grant them the
right to buy shares at a fixed price any time until expiration.
(Reporting by Jonathan Spicer; editing by John Wallace)

CORRECTED-UPDATE 2-Nasdaq OMX in big share buyback; stock soars