- Atlantia will be delisted after its takeover
- Many Italian companies avoid the stock market
- Authorities seek to boost Borsa Italiana’s reputation
MILAN, Nov 25 (Reuters) – The takeover of Atlantia (ATL.MI) will slash a further 19 billion euros ($19.5 billion) from the value of the Milan stock exchange and bring the number of companies to 12 who will leave the exchange this year, fueling fears about its status.
Lawmakers and regulators want to reverse the trend and strengthen the role of the 200-year-old Borsa Italiana at the heart of Italian business.
Barbara Lunghi, head of stock listings in Italy at market owner Euronext, says being a listed company and having outside investors drives companies to innovate and grow.
“It gives businesses additional equipment that helps drive growth,” Lunghi said.
But the problem has deep roots, with many Italian family businesses unwilling to relinquish control by listing their businesses unless they need cash for mergers and acquisitions or other expansion strategies.
Market watchdog Consob this year approved measures to simplify approval procedures for IPO prospectuses, including allowing them to be submitted in English.
Also aiming to accelerate change, Italy this year began exploring how to revise its listing, voting and other rules to address issues holding back the country’s capital markets – although that process has been frozen by a change. of government after the victory of a right-wing coalition. elections at the end of September.
EXODUS FROM MILAN
So far this year, 11 companies have dropped out of Euronext Milan, including the Agnelli family’s holding company, Exor (EXOR.AS), which has moved to the Amsterdam stock exchange in line with where it is legally registered. .
Road and airport operator Atlantia leaves after a takeover by the Benetton family and Blackstone crossed the 90% support threshold on Thursday.
Travel caterer Autogrill (AGL.MI) is set to be delisted after a merger with Switzerland’s Dufry, and the fate of shoemaker Tod’s (TOD.MI) remains uncertain after a failed takeover bid for its principal shareholder.
CNH Industrial (CNHI.MI), whose shares are listed in both Milan and New York, is also evaluating the possibility of ending its dual listing and focusing on the NYSE.
The privatization of listed companies is a broader trend shared by many European stock exchanges, as low prices and the availability of cheap money made it practical.
On the positive side, four companies have joined Euronext Milan’s main market this year, including truck maker Iveco (IVG.MI), which is the result of a spin-off. Two other companies moved from the smaller Euronext Growth Milan.
The situation is healthier for Euronext Growth Milan itself, a market dedicated to small and medium-sized companies with minimal access conditions. In 2022, it had 18 new listings, but the overall market capitalization is very low.
The dearth of Italian IPOs is an ongoing problem.
Over the past 20 years, the main market has lost 268 listed companies and gained only 185, according to an Intermonte study published in March. In contrast, the less regulated SME market attracted 263 listed companies and recorded 68 delistings.
The fact that there are relatively few listed companies has its roots in the country’s history, said Andrea Beltratti, professor of political economy at Bocconi University in Milan.
Beltratti said Italy does not have a long tradition of equity financing and its economy has been relatively weak over the past 20 years.
The strong presence of banks and other financial intermediaries in Italy supplanted the role of the markets, so that companies often preferred to seek financing from them.
“The benefits of being listed are the ease of raising capital and reputation (position), but there are also costs, associated with regulation, the need for transparency and the many interactions with investors,” Beltratti said. .
“I don’t think these are issues that can be resolved in months or even years because it’s a cultural issue,” Beltratti added. ($1 = 0.9755 euros)
Reporting by Elisa Anzolin; Graphic by Danilo Masoni; Editing by Keith Weir and David Holmes
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