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Deals

Euronext offers Rome concessions to win Borsa Italiana

ROME/LONDON (Reuters) - French stock exchange operator Euronext ENX.PA has made Rome a key ally in its bid plan to take over Borsa Italiana, granting Italian state lender CDP significant influence in the combined business, sources familiar with the matter told Reuters.

FILE PHOTO: A woman goes past the Italian Stock Exchange in Milan, as the country is hit by the coronavirus outbreak. Italy, February 25, 2020. REUTERS/Flavio Lo Scalzo/File Photo

CDP is set to take a stake of around 8% in Euronext, equalling that held by French state investor Caisse des Depots et Consignations, the sources said, speaking on condition of anonymity.

Italian bank Intesa Sanpaolo ISP.MI has also teamed up with CDP to safeguard Italian interests in the Milan bourse, while other Italian investors are set to join, the sources said.

Intesa Sanpaolo, Euronext and the Italian Treasury declined to comment.

Rome is keen to see the Euronext consortium prevail in negotiations with the London Stock Exchange (LSE) LSE.L, which took control of Borsa in 2007 and is now trying to sell it as part of the regulatory remedies to clear its $27 billion acquisition of data provider Refinitiv.

Italian Finance Minister Roberto Gualtieri held talks over the future of the bourse with Euronext Chief Executive Stephane Boujnah in a private meeting in Rome on Wednesday.

Euronext’s proposal would offer Italy two seats on its managing board and additional representation at all governance levels, one of the sources said.

Boujnah is also prepared to grant Italy the ability to appoint Euronext’s supervisory board chairman, who oversees the activity of the managing board, one of the sources said.

In addition, Rome will exercise great influence over Borsa’s MTS platform, which is used for trading Italy’s huge sovereign debt and is seen as an asset of strategic importance, this source said.

Discussions over the deal structure are still fluid and both sides have yet to reach a final agreement, the sources said.

Swiss stock exchange Six and Deutsche Boerse DB1Gn.DE are also planning to launch rival bids for the Milan bourse, with Six hoping to lure Rome with a proposal that would give Borsa some form of strategic independence by keeping its management team, brand and autonomy, two separate sources said.

Six became Europe’s third largest stock exchange operator by revenues after completing a 2.57 billion euro ($3.05 billion)takeover of Spanish rival BME earlier this year.

But while LSE will review the offers and shortlist the final bidders, the Italian Treasury is playing kingmaker and will use its “golden power” legislation to block any unwanted takeover of Borsa, deemed a key asset by Italian lawmakers.

Six and Deutsche Boerse declined to comment.

Reporting by Giuseppe Fonte in Rome and Pamela Barbaglia in London; additional reporting by Valentina Za, Elvira Pollina and Elisa Anzolin in Milan; Editing by Susan Fenton and Mark Potter

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