March 18, 2020 / 6:56 PM / 15 days ago

UPDATE 1-Spain's regulator recommends approval of BME takeover by SIX

(Adds details, share price movement in BME)

MADRID, March 18 (Reuters) - Spain’s stock market regulator CNMV has issued a favourable recommendation for the Spanish government to approve a proposed takeover of Madrid stock exchange BME by Swiss exchange SIX, a CNMV spokesman said on Wednesday.

The government has the final say on the clearance of the friendly, all-cash 2.84 billion euro offer, and has until May 6 to issue its ruling, the spokesman said.

The Spanish government could still set some conditions on the deal, requiring SIX to make revisions to its offer, a source with knowledge of the matter had said earlier.

On Tuesday, a Spanish government source, speaking on condition of anonymity, had told Reuters after the market close the government expected the deal to go ahead soon.

The government said BME would not be affected by new rules approved on Tuesday to block foreign acquisitions of strategic companies, which had initially spooked some BME investors, prompting its shares to fall as much as 9.6%.

On Wednesday, BME’s shares rose 7.3% to 30.4 euros. The decree said companies considered strategic are in the telecommunications, utilities and power sectors and Switzerland is not among the countries affected by the restrictions.

SIX’s bid of 34 euros a share for BME, which it submitted in November, implied then a premium of 34% over the Spanish bourse’s market capitalisation of roughly 2 billion euros prior to the offer. (Reporting by Jesus Aguado and Belen Carreno; editing by Andrei Khalip and Jane Merriman)

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