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© Reuters. FILE PHOTO: The brand of an infrastructure group Atlantia is seen outdoors their headquarters, in Rome, Italy October 5, 2020. REUTERS/Guglielmo Mangiapane
By Elisa Anzolin
MILAN (Reuters) – The buyout of Atlantia will lower one other 19 billion euros ($19.5 billion) from the worth of the Milan bourse and produce to 12 the variety of corporations to depart the inventory change this 12 months, fuelling fears about its standing.
Legislators and regulators need to reverse the pattern and reinforce the position of the 200-year-old Borsa Italiana on the coronary heart of Italian enterprise.
Barbara Lunghi, head of fairness listings Italy at market proprietor Euronext, argues the scrutiny of being a listed enterprise and having exterior traders pushes companies to innovate and develop.
“It provides corporations that additional gear that helps to drive development,” Lunghi mentioned.
However the issue has deep roots, with lots of Italy’s family-run companies unwilling to relinquish management by itemizing their companies except they want money for M&A or different growth methods.
Market watchdog Consob authorised measures this 12 months to simplify procedures for the approval of IPO prospectuses, together with permitting them to be submitted in English.
Additionally aiming to speed up change, Italy this 12 months began to check the best way to overhaul its itemizing, voting and different guidelines to handle the problems holding again the nation’s capital markets – although this course of was frozen by a change in authorities after a right-wing coalition gained elections on the finish of September.
MILAN EXODUS
Thus far this 12 months 11 corporations have deserted Euronext Milan, together with the Agnelli household’s holding firm Exor (OTC:), which moved to the Amsterdam bourse according to the place it’s legally registered.
Street and airport operator Atlantia is leaving after a buyout by the Benetton household and Blackstone (NYSE:) handed the 90% help threshold on Thursday.
Journey caterer Autogrill is predicted to be delisted after a merger with Switzerland’s Dufry, and the destiny of shoemaker Tod’s stays unsure after the failure of a buyout supply by its predominant shareholder.
CNH Industrial (NYSE:), whose shares are listed each in Milan and New York, can also be evaluating the potential for placing an finish to its twin itemizing and specializing in the NYSE.
Taking listed corporations personal is a broader pattern shared by many European inventory exchanges, as low costs and availability of low cost cash made it handy.
Milan market cap vs Paris and London – https://fingfx.thomsonreuters.com/gfx/mkt/lgvdkwalqpo/Milanpercent20stockpercent20marketpercent20size.PNG
FEW NEWCOMERS
On the plus aspect, 4 corporations joined the principle Euronext Milan market this 12 months, together with truckmaker Iveco, which was the results of a spin off. Two different corporations upgraded from the smaller Euronext Progress Milan.
The state of affairs is more healthy for Euronext Progress Milan itself, a market devoted to small and medium-sized enterprises with minimal entry necessities. In 2022 it counted 18 new listings, however the general market cap may be very low.
A dearth of Italian IPOs is a perennial problem.
Over the previous 20 years, the principle market has misplaced 268 listed corporations and gained solely 185, in accordance with Intermonte analysis printed in March. In distinction, the much less regulated SME market has attracted 263 listed corporations and seen 68 delistings.
CULTURAL ISSUE
The truth that there are comparatively few listed corporations has its roots within the nation’s historical past, mentioned Andrea Beltratti, professor of Political Financial system at Milan’s Bocconi College.
Beltratti mentioned Italy lacks an extended custom of fairness finance and its economic system has been comparatively weak for the final 20 years.
The heavy presence of banks and different monetary intermediaries in Italy has supplanted the position of the markets, so corporations typically most popular to ask them for funding.
“The advantages of being listed are the benefit of gathering capital and reputational (place), however there are additionally prices, related to regulation, the necessity for transparency, and the numerous interactions with traders”, Beltratti mentioned.
“I do not assume these are points that may be solved in months and even years as a result of it’s a cultural problem,” Beltratti added.($1 = 0.9755 euros)
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