labels: m&a, stock markets - world
LSE''s 1.6 billion euro bid gets backing of Borsa Italinia boardnews
23 June 2007

The board of the Borsa Italiana SpA has accepted the offer by the London Stock Exchange Group PLC to acquire the Italian stock exchange for just over €1.6 billion, or $2.1 billion, beating out a rival preliminary offer from the New York Stock Exchange parent NYSE Euronext Inc., sources familiar with the matter said.

Further details will be made available through a press release at a later stage, sources said.

Borsa Italiana has authorized its chief executive Massimo Capuano to finalise the all-paper deal that values the Italian stock exchange at €1.6 billion.

The acquisition while giving LSE exposure to the fast-growing derivatives business, would also help ward off any future takeover attempts by Nasdaq Stock Market Inc., which has tried unsuccessfully to buy LSE twice and still holds about a 30 per cent stake in LSE.

Borsa Italiana board unanimously agreed to the takeover, people familiar with the matter said. However, a final deal needs approval by the LSE''s shareholders.

Borsa Italiana didn''t present a late indicative offer by NYSE Euronext to its board, although the offer was potentially valued at as much as €300 million more than LSE''s offer.

Board members were, however, made aware of the competing proposal, sources said.

A running feud between NYSE Euronext and Borsa Italiana seems to have swinged the deal in favour of LSE. The Italian bourse backed out of talks to join with Euronext last year and tried to strike a deal with German exchange Deutsche Börse AG, which was at the time competing with NYSE Group.

Euronext. Borsa Italiana also expected to have a greater say at the LSE than at the much-larger NYSE Euronext, and considered the cultural fit to be better with London than New York.

The tie-up plan envisages a board with LSE naming seven directors and Borsa Italiana five.

The combine will be headed by LSE chief executive Clara Furse, with Borsa CEO Massimo Capuano taking the deputy role, according to people familiar with the matter. LSE chairman Chris Gibson-Smith will remain chairman at the combined company.

The LSE-Borsa Italiana combine will be the largest stock market in Europe, trading international giants like mobile-phone company Vodafone Group PLC, oil company BP PLC and industrial power Fiat SpA.

London also will inherit a trade-processing, or clearing-and-settlement, business, even though it has been a vocal opponent of exchanges owning both trading and post-trading services.

The NYSE Euronext offer is at a preliminary stage and could be restructured, according to the Wall Street Journal. NYSE Euronext is the parent of the New York Stock Exchange.


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LSE''s 1.6 billion euro bid gets backing of Borsa Italinia board