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By Freya Berry
LONDON, March 25 (Reuters) - Borse Dubai, thebiggest investor in the London Stock Exchange is sellingits stake in the British exchange, which will raise around 1.5billion pounds ($2.23 billion).
The sale of the 17.4 percent holding by the biggest singleshareholder in the LSE will take place via a so-calledaccelerated book building process, a source familiar with thesituation told Reuters on Wednesday.
Borse Dubai, which was not immediately available forcomment, is the holding company for Dubai Financial Market (DFM)and Nasdaq Dubai. It was formed in August 2007 to consolidatethe government of Dubai's two stock exchanges as well as itsinvestments in other exchanges such as the LSE.
The Dubai exchange became a major shareholder in Nasdaq in a complex deal in 2007, buying a 28 percent stake inthe LSE from the U.S. exchange for 1,414 pence per share.
Borse Dubai has since reduced its LSE stake and in Septemberlast year sold around 3.1 percent of the London exchange. At thetime it said it had "no current intention to sell any furthershares" and it remained "a long-term supportive shareholder".
Shares in the LSE have risen since then and closed onWednesday at 2,538 pence, valuing the Borse Dubai shareholdingat around 1.5 billion pounds.
Borse Dubai's exit will leave Qatar Investment Authority(QIA) as the biggest shareholder in the LSE with a 10.3 percentstake.
Bank of America Merrill Lynch, Barclays and Nomura areworking as joint bookrunners on the stake sale, the source toldReuters on condition of anonymity, adding that there had alreadybeen sufficient demand for the shares to "cover the books",which means that the banks carrying out the sale should not beleft holding unwanted stock.
($1 = 0.6717 pounds) (Additional reporting by Sophie Sassard and Sudip Kar-Gupta;Writing by Alexander Smith; editing by Susan Thomas)