- Atlantia will be delisted after takeover
- Many Italian companies avoid the stock market
- Authorities are trying to boost the reputation of Borsa Italiana
MILAN, Nov 25 (Reuters) – The acquisition of Atlantia (ATL.MI) will reduce the value of the Milan Stock Exchange by a further 19 billion euros ($19.5 billion) and the number of companies trading this year Exit stock market, increase to 12. Raising fears about his reputation.
Lawmakers and regulators want to reverse the trend and strengthen the 200-year-old Borsa Italiana’s role at the heart of Italy’s economy.
Barbara Lunghi, Head of Equity Listings Italy at market owner Euronext, argues that the scrutiny of being a public company and having external investors pushes companies to innovate and develop.
“It gives companies the extra equipment to help fuel growth,” Lunghi said.
But the problem runs deep, as many of Italy’s family-owned companies are unwilling to relinquish control by listing their companies unless they need cash for M&A or other expansion strategies.
Market watchdog Consob this year approved measures to simplify procedures for approving IPO prospectuses, including the ability to file them in English.
To speed the change, Italy this year began exploring how it could revise its listing, voting and other rules to address the problems holding the country’s capital markets back — although this process will be fueled by a change of government after a right-wing victory Coalition was frozen early September elections.
So far this year, 11 companies have left Euronext Milan, including the Agnelli family holding company, Exor (EXOR.AS), which has moved to the Amsterdam Stock Exchange, according to where it is legally registered.
Road and airport operator Atlantia is leaving after a takeover by the Benetton family and Blackstone crossed the 90% threshold on Thursday.
Travel caterer Autogrill (AGL.MI) is expected to be delisted after a merger with Switzerland’s Dufry, and the fate of shoemaker Tod’s (TOD.MI) remains uncertain after a takeover bid by its main shareholder failed.
CNH Industrial (CNHI.MI), whose shares are listed in both Milan and New York, is also considering the possibility of exiting its dual listing and focusing on the NYSE.
The privatization of listed companies is a broad trend shared by many European stock exchanges as low prices and the availability of cheap money made this convenient.
On the plus side, four companies joined Euronext Milan’s main market this year, including truckmaker Iveco (IVG.MI), which was the result of a spin-off. Two other companies rose from the smaller Euronext Growth Milan.
For Euronext Growth Milan itself, a market for small and medium-sized companies with minimal entry requirements, the situation is healthier. 18 new listings were counted in 2022, but the total market capitalization is very low.
A lack of Italian IPOs is an ongoing issue.
Over the past 20 years, the main market has lost 268 listed companies and gained just 185, according to a study by Intermonte published in March. In contrast, the less regulated SME market has attracted 263 listed companies and seen 68 delistings.
That there are relatively few listed companies has its roots in the country’s history, said Andrea Beltratti, a professor of political economy at Milan’s Bocconi University.
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 has supplanted the role of markets, with companies often preferring to seek financing from them.
“The benefits of a public listing are 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 problems that can be solved 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; Edited by Keith Weir and David Holmes
Our standards: The Thomson Reuters Trust Principles.