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Eight 'anchor' investors to back Euronext listing - sources

Published 15/04/2014, 18:28
Updated 15/04/2014, 18:33

By Sophie Sassard, Freya Berry and Jean-Baptiste Vey

LONDON (Reuters) - A consortium of eight 'anchor' investors have committed to buying a 25-30 percent stake in stock exchange operator Euronext ahead of a potential 1.5 billion-euro (2 billion pounds) listing by current owner IntercontinentalExchange (ICE), which is expected in June, three sources familiar with the matter said on Tuesday.

The group of investors comprises BNP Paribas, 4:SOGN, Caisse des Depots, ING, ABN Amro, Banco Espirito Santo, the Belgian government investment vehicle SFPI and Belfius bank.

Euroclear, one of the two main clearing houses for securities traded in Europe alongside Deutsche Boerse's Clearstream, is also expected to join the consortium, one of the sources said.

A spokesperson for Euroclear said it has a long-standing relationship with Euronext as the settlement agent for almost all the exchange's cash equity trades but could not confirm an intent to join the investor consortium.

"We are following developments on their upcoming IPO with interest," he said.

Belfius said it was still reviewing its options.

Anchor investors were brought in as part of efforts to keep Euronext in the hands of its constituent exchanges rather than those of circling rivals including the London Stock Exchange and Nasdaq.

Anchor investors commit to buying a stake in an initial public share offer before the event to bring certainty of pricing and control and help to ensure its success.

A spin-off of Euronext has been expected since ICE's $11 billion (6 billion pounds) deal last year to take over NYSE Euronext, parent company of the New York Stock Exchange.

ICE is expected to save $500 million through selling off Euronext, which is not seen as core to its business strategy. Euronext operates exchanges in Paris, Amsterdam, Brussels, London and Lisbon.

RBC Capital Markets analyst Peter Lenardos said he was surprised no rival exchanges or clearing houses had joined the consortium to make the most of an opportunity to grab market share.

"There are no strategic players (in the consortium). I would have expected another exchange, or a significant clearing house (to take a stake).

"If I was at an exchange group with technology to sell and a clearing service to sell, I would consider making a strategic investment (in Euronext). Euronext needs clearing and technology," Lenardos told Reuters.

"LCH.Clearnet taking a 5 percent stake would have made perfect sense because they clear for Euronext. Maybe (Euronext) didn't want any exchanges or banks from outside of their home countries," he added.

LCH.Clearnet is majority owned by the London Stock Exchange.

The main attraction for ICE in acquiring NYSE Euronext was Liffe, Europe's second biggest derivatives market behind Deutsche Boerse's Eurex. Liffe also has a U.S. business that ICE said it will wind down, moving the derivatives contracts to other exchanges.

Euronext, SFPI, Caisse des Depots, ING and BNP Paribas declined to comment. The other institutions were not immediately available for comment.

(Additional reporting by Clare Hutchison; Editing by David Goodman and Greg Mahlich)

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