The pan-European stock market operator Euronext announced on Monday that it has submitted an offer to buy Milan’s Borsa Italiana from the London Stock Exchange Group in collaboration with Italy’s CDP Equity and Intesa Sanpaolo.
Euronext, which competes with Germany’s Deutsche Boerse and Switzerland’s SIX group for the Italian exchange operator, said there was no certainty that the “non-binding” bid would lead to a transaction.
The potential for a bidding war over the Milan Stock Exchange opened up after its current owner, the London Stock Exchange Group (LSEG), said in July that it was prepared to sell the subsidiary to win approval from the European Commission for its planned purchase of US financial data provider Refinitiv.
According to sources familiar with the negotiations, the Swiss market operator SIX’s offer would give Borsa Italiana plenty of autonomy and a significant amount of investment, including in technology.
No financial details about offers have been released, but according to the news agency Bloomberg, Borsa Italiana can raise between 3.5 and 4.0 billion euros.
The Italian economic news agency Radiocor quoted sources close to the matter and said that SIX’s offer was the highest.
SIX is a privately owned company and is not obliged to publish its offer.
SIX can also raise its bid without seeing its own share price fall in exchange.
In addition to operating the Milan Stock Exchange, Borsa Italiana also has trading platforms for government bonds, a clearing house for trading operations plus a depot, which would make it a valuable addition for all three bidders.
Euronext said last week that they are working with Italy’s CDP Equity, part of a state-owned banking group, to make their bid for Borsa Italiana.
On Monday, it added that it would get Intesa Sanpaolo, Italy’s largest bank through capitalization.
“The proposed combination of Borsa Italiana and Euronext would create a leading player in the continental European capital markets, where Italy would be the largest revenue contributor to the enlarged Euronext group,” the statement said, citing the importance of the Italian operator.
Euronext, which operates a handful of European stock exchanges, including the one in Paris, has recently been on a shopping spree and bought the Danish central securities depository, VP Securities, last month to expand its Nordic footprint.
It also acquired the Scandinavian electricity exchange Nord Pool in January and the Oslo Stock Exchange in June 2019.
However, it decided not to buy the Madrid Stock Exchange, which was eventually snatched up by SIX.
Rome has said that all offers will be carefully scrutinized by the government and regulators.
Source: sn.dk