Euronext and CDP confirm bid for Borsa Italiana

The competition for Borsa Italiana is intensifying with pan European stock exchange group Euronext confirming it was in talks with the equity arm of Italian state owned bank Cassa Depositie Prestiti (CDP) to submit an offer to acquire the Italian bourse from the London Stock Exchange Group.

It has been reported that Italian bank Intesa Sanpaolo has also teamed up with CDP to safeguard Italian interests in the Milan exchange, while other Italian investors are set to join.

The proposal is for CDP to take a stake of around 8% in Euronext, equalling that held by French state investor Caisse des Depots et Consignations. In addition, it has been mooted that Intesa would get a smaller slice of about 2%.

This week Italy’s Finance Minister Roberto Gualtieri held talks over the future of the Italian bourse with Euronext CEO Stephane Boujnah in a private meeting in Rome.

The LSE, which bought the Italian group in 2007 for €1.6bn, said in July that it was in exploratory talks to either sell the MTS bond trading platform, or the entire group, in order to gain approval from the European Commission for its $27 bn acquisition of data provider Refinitv.

The EU’s antitrust regulators expressed concern in June about the dominant market share of the combined company’s trading of European government bonds because both MTS’ trading venue and Refinitiv’s Tradeweb are already market leaders.

The Borsa generated about 14% of the LSE’s earnings last year and is a key entry point for the London’s exchange into Europe post-Brexit.

The Italian Ministry of Economy and Finance, who owns the majority of CDP, is thought to be in favour of the deal with Euronext but it will face opposition from Switzerland’s SIX Group and Germany’s Deutsche Börse, both of whom are thought to be preparing to launch their own respective bids.

SIX became Europe’s third largest stock exchange operator by revenues after completing a €2.57 bn takeover of Spanish rival BME earlier this year.

©BestExecution 2020

 

 

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