(Repeats story published late on Wednesday)
By Jonathan Spicer
NEW YORK, Sept 3 (Reuters) - Nasdaq OMX Group Inc <NDAQ.O> could bid for a majority stake in the Prague Stock Exchange, which is on the auction block and would give the U.S. company a foothold in the hotly contested region, sources familiar with the situation said.
A source at the privately held Prague exchange, which is valued at more than $300 million, said Nasdaq has showed interest.
A second source with direct knowledge of the situation told Reuters a stake in exchanges based in Central or Eastern Europe, such as the Prague exchange, "is certainly something that is consistent with what OMX has looked at in the past."
"The Prague exchange is running a pretty broad process, so I think you can assume that there are a lot of different participants taking a look," said the second source, who spoke on the condition of anonymity.
Nasdaq, which completed its merger with Nordic exchange OMX earlier this year, said it does not comment on speculation.
But analysts said a bid from Nasdaq would avoid the politics that could snag a bid from neighboring European exchanges, which are keen to absorb smaller peers that fail to attract many new listings, such as the Czech Republic market.
"Because Nasdaq is a big player in the world, there would be a lot of interest among small exchanges to be associated with it," said Bernardo Mariano, an analyst specializing in privately held exchanges at Connecticut-based advisory firm Equity Research Desk.
"This would be a great move for Nasdaq to create a beachhead in Eastern Europe, which has been a very hard market to consolidate,"
The Prague Stock Exchange (PSE) and its owners announced on Aug. 6 a formal search for a partner to buy a majority stake. Its biggest shareholder, investment bank Patria Finance, later said shareholders may sell a stake of more than 90 percent by the end of the year.
Patria Finance said on Wednesday it had no comment on a possible Nasdaq bid.
SUITORS CIRCLING
Nasdaq and U.S. rival NYSE Euronext <NYX.N> have moved aggressively in recent years to stay afloat in the rapidly consolidating world of exchanges, where upstarts chip away at the established giants.
Analysts, as well as a small PSE stakeholder, have named the Warsaw exchange and European heavyweight Deutsche Boerse <DB1Gn.DE> as other possible suitors for the Prague exchange.
Last month, the CEO of Vienna exchange operator Wiener Boerse told Reuters it would likely bid for the PSE. Last week, Czech newspaper E15 reported Nasdaq was interested in buying the Prague market, citing sources.
"Nasdaq, as an outsider, probably has a better chance to consolidate that market than Warsaw or Vienna because of the rivalry in local politics in Eastern Europe," Equity Research Desk's Mariano said.
Competition sharpened in the region late last year with the Markets in Financial Instruments Directive (MIFID), intended to increase trading competition in the European Union.
In the race to grow, Warsaw recently overtook Vienna in market capitalization. The Prague exchange is third in the region, where a plan to create a single stock exchange has for now been abandoned.
Prague trades equities, debt and futures contracts, and its main SPAD trading segment lists 14 stocks with a market capitalization of about $114 billion.
Trading on the exchange has ramped up in recent years due to an improved regulatory environment and the country's economic convergence with Western Europe. However, it has attracted only six new listings in the last decade.
Nasdaq has said it is looking to expand in Europe and trade in new asset classes. To that end, it announced the buyout of European power exchange NordPool earlier this year.
Although the operator of the Nasdaq Stock Market says it wants some time to digest recent acquisitions, earlier this month, it pushed forward the integration timetable for both OMX and options venue Philadelphia Stock Exchange.
The source at the Prague mart said Goldman Sachs is collecting the bids for a possible stake. (Additional reporting by Jana Mlcochova in Prague; editing by Jeffrey Benkoe and Gerald E. McCormick)
