Friday 11 September 2020 12:16 pm

Euronext confirms talks to bid for London Stock Exchange’s Borsa Italiana

European exchange Euronext has confirmed that it is in talks with state-owned Italian investment bank CDP to submit a bid to buy Borsa Italiana from the London Stock Exchange (LSE).

In July, LSE said that it may sell Borsa Italiana or just its bond-trading platform MTS as it tries to win EU approval for its $27bn (£21bn) takeover of data firm Refinitiv.

Read more: London Stock Exchange considers selling Milan bourse to secure Refinitiv deal

It bought the Italian exchange for €1.6bn (£1.5bn) in 2007. Reports have said potential bidders now value it at between €3.3bn and €3.7bn.

LSE has already received bids for MTS and will have to decide whether it wants to break up Borsa Italiana or sell it whole, according to a source who spoke to Reuters.

Italian government concerned about Borsa Italiana deal

The Italian government is said to be firmly against the break-up of Borsa. And LSE may want to keep it happy as it tries to finalise the Refinitiv deal. The Italian Ministry of Economy and Finance owns the majority of CDP (Cassa Depositi e Prestiti).

However, Euronext – which runs exchanges in Amsterdam, Paris, Dublin and elsewhere – will face opposition from Switzerland’s Six and Deutsche Boerse. Both exchanges are planning to put in bids for Borsa Italiana, according to Reuters sources.

Switzerland’s Six, Deutsche Boerse and London Stock Exchange all declined to comment.

In June, Brussels sent the LSE-Refinitiv merger, which was announced last year, for a full antitrust investigation. It is concerned that the combined group could use its data access and exchange system to offer customers unfair advantages.

Read more: Singapore watchdog raises concerns over LSE’s $27bn Refinitiv deal

Brussels is also looking at concerns over bond trading. Italian authorities have said they are worried about bond-trading platform MTS being sold to LSE, which already owns bond-trading venue Tradeweb. They have said it is a strategic asset.

Reuters Thompson currently owns 45 per cent of Refinitiv, which provides rapid financial data.