05 April 2013

Reuters: France wants banks to be core Euronext investors

The French government has approached the country's banks and insurers about forming a consortium to buy at least 34 per cent of the Euronext stock exchange, due to be spun off in a public offering, sources close to the matter said on Friday.

But banks, whose latitude for making such investments has been reduced by looming capital rules, are resisting the government's entreaties, the sources said.

French lenders and the Socialist government of President Francois Hollande have been at odds over several issues, including taxation and regulation, although the banks succeeded in softening a threatened crackdown. The government is keen on stopping the exchange, now part of NYSE Euronext, from falling into foreign hands, a concern some banks share as it could leave them in a weaker position to win mandates for the listing of major French companies. The Treasury has been in touch with the French banks but they have shown little enthusiasm so far, the source said, adding that the dossier was at an exploratory stage.

While buying a 34 per cent stake looks challenging, there could be a rationale for French and European banks to hold a smaller stake - around 10 to 15 per cent - and have a say in the exchange's strategy, a second source close to the deal said.

While bankers view a merger with Deutsche Boerse as the best strategic option to create a truly European player, that option does not seem to be high on the French government's agenda. Private equity buyers who have invested in exchanges in the past could also be interested in taking a minority stake in Euronext, either alone or within a consortium.

Two of the people said France could itself take a minority stake in Euronext as a last resort through state bank Caisse de Depots or sovereign wealth fund FSI. The government helps regulate Euronext so could set limits on its future ownership.

 

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