By Amy-Jo Crowley, Oliver Hirt, Andres Gonzalez and Pablo Mayo Cerqueiro
LONDON(Reuters) -Swiss stock market operator SIX Group is considering a bid for fund distribution company Allfunds, according to two sources with knowledge of the situation, a move that could be complicated by the difficulty of raising acquisition financing.
Allfunds management is expected to meet prospective bidders next month, one of the sources said, while the other said no offer from the Zurich-headquartered SIX was imminent.
Allfunds shares rose as much as 9.5% after Reuters initially reported the news and were last up 7.9% at 6.29 euros per share.
Amsterdam-listed Allfunds is working with Goldman Sachs (NYSE:GS) and Citigroup on a strategic review that could lead to a sale and has also attracted interest from private equity firms, two other people with knowledge of the situation said.
Although conversations over the future of Allfunds are preliminary, they may gain momentum during the first quarter after it publishes its annual results in February, the two sources said.
Funds including Advent, Brookfield, CVC and KKR have shown an interest, two people familiar with the process said, but it was unclear if any planned to pursue an offer.
Spokespeople for SIX, which is owned by around 120 banks, and Allfunds, declined comment. Advent, Brookfield, CVC and KKR declined to comment.
None of the five sources could be named because the discussions are not public.
Some of them said SIX could face challenges in raising financing for an acquisition.
It announced a net loss of up to 1.1 billion Swiss francs ($1.27 billion) for 2023, mainly because of impairments of its stake in European payments provider Worldline.
Euronext, home to the Paris, Amsterdam and Milan stock exchanges, made an aborted 5.5 billion euro ($5.97 billion) bid for Allfunds last year.
The board of Allfunds, which had a market capitalisation of 3.62 billion euros on Tuesday, said it had held talks with Euronext but the terms of its proposal were "inadequate".
Allfunds, which provides funds access to a broad network of financial institutions, has 1.3 trillion euros of assets under administration through 860 distributor contracts and 17 offices around the world.
In October Allfunds reported increased third-quarter outflows, saying global market volatility affected activities of some existing clients. It posted net outflows of 5.9 billion euros on its platform from existing and new clients, compared with 4.3 billion euros a year earlier.
($1 = 0.8693 Swiss francs)
($1 = 0.9203 euros)