On Tuesday 26 November, the shareholders of the London Stock Exchange will vote on the board’s proposal to acquire Refinitiv information provider, in a paper-to-paper transaction that will bring the private equity funds that control Refinitiv to own a 37% stake in the capital of the new group and with just under 30% of the voting rights. All for a Refinitiv valuation of 27 billion dollars (see here a previous post by BeBeez).
As the deal becomes more and more concrete, it is becoming more and more likely what BeBeez wrote at the beginning of last August (see here a previous BeBeez Peak) that is to say that the Italian subsidiaries of the LSE could have another destiny from still being controlled by the LSE. Their future might pass through an intervention of Cassa Depositi e Prestiti (Cdp, Italy’s National Development Finance Institution). The latter, with its investment veichle Cdp Equity and F2i sgr, the infrastructure private equity firm co-sponsored by Cdp, could easily carry out the deal, also because the financial infrastructures are to be considered strategic and therefore the Italian government could have all the right to intervene on the subject.
Many people do not like the idea of having not only Borsa Italiana, but also MTS (Italy’s Government bond market platform), Cassa di Compensazione & Garanzia (clearing company) and Monte Titoli (settlement company) under control of a non-EU entity, downstream of Brexit, but even more so with the entry into the capital of LSE of non-EU funds (the shareholders of Refinitiv are Blackstone, Canada Pension Plan Investment Board, the sovereign fund of Singapore GIC and other co-investors as well as Thomson Reuters). All this while Borsa Italiana would also be targeted by Euronext, which is now officially committed to the conquest of the Madrid Stock Exchange, for which, however, Zurich’s Six has already filed a formal offer.
Investment bank Mediobanca then went on to validate the hypothesis of Borsa Italiana coming back home in the last few days. According to MF Milano Finanza, the analysts of the bank have in fact packaged a document that envisages the possibility of an ipo for Borsa Italiana which would see the exit from capital by the LSE and the entry of an anchor investor ( for example, Cdp) and a group of private investors. The consortium would take a 40-50% stake in the ipo, while the other 50% would be offered on the market. Later the company could enter a European circuit of financial centers.
The Mediobanca document values Borsa Italiana up to 3.5 -4 billion euros, starting from the fact that it is a group that should close the year with 445 million euros in revenues, an ebitda of 240 millions and a net profit of 110 millions. Applying an ebitda multiple of 11 times, as happened for the Madrid Stock Exchange offer, Piazza Affari would be worth 2.64 billion, but applying the multiples that are listed on the market with Euronext and Deutsche Börse, around 15 times, this would lead to 3.6 billion and even to 4 if the even higher multiples used by American lists were applied.