IntercontinentalExchange Group Inc. plans to sell as much as 30 percent of Euronext NV before the operator of the Paris and Amsterdam exchanges goes public this year, three people with knowledge of the matter said.
Euronext’s advisers are preparing to start talks as soon as this month with potential buyers willing to hold their stakes after the initial public offering, said the people, who asked not to be identified because the talks are private. No single investor will be allowed to own more than 10 percent of Euronext without regulatory approval, a process that could take as long as a year, according to the people.
ICE is seeking to spin off Euronext after acquiring the exchange through its purchase of NYSE Euronext in November. European regulators are forcing ICE to keep a 25 percent stake in the exchange for three years after the IPO, unless it can attract investors prepared to hold stakes for the long term, the people said, without being more specific.
“A European solution is intent on ensuring Euronext remains European with European shareholders,” said Peter Lenardos, exchange analyst at RBC Capital Markets in London. “The regulator demands on the ownership of Euronext, and current proposals in Europe to tax transactions and limit high-frequency trading, are likely reasons why ICE is not interested in owning the asset.”
Euronext values itself at between 1.5 billion euros ($2 billion) and 1.8 billion euros, the people said. Caroline Nico, a spokeswoman for Euronext in Paris, and ICE’s Claire Miller declined to comment for this story.
Euronext, formed from the merger of the Paris, Amsterdam and Brussels exchanges in 2000, completed its initial share sale in 2001. After a series of acquisitions including that of Liffe, Europe’s second-largest derivatives market, Euronext sold itself in 2007 to NYSE Group Inc., forming the world’s biggest stock-exchange operator. In December 2012, ICE said it would buy the company and spin off Euronext after completion. ICE is keeping the London-based Liffe derivatives market.
Euronext is targeting European banks and fund managers for the stakes, the people said. If regulators approve the so-called cornerstone investors, the exchange will then proceed with the planned initial offering, they said, adding that if the company fails to get agreement on them, it will still proceed with an IPO this year.
Euronext hasn’t determined the size of the stake to be sold in the offering, the people said. The IPO could be for as much as 50 percent of the Euronext, they said.
As Euronext moves toward an IPO, the Dutch and French regulators who oversee the exchange have some differing views on its future, with both sides seeking to protect national interests, the people said. While the French want an initial share offering, the Dutch are prepared to approve a takeover, the people said.
While Euronext is debating the option of a dual listing in Paris and Amsterdam, overseen by the Dutch, the bourse hasn’t reached a decision yet, the people said.
The Dutch are fighting for Euronext once again, after they sold their local exchange in 2000. At the time, Jean-Francois Theodore, who led the Paris bourse, became the first Euronext CEO. He was scheduled to step down after a four-year term, making way for George Moeller, who was chief operating officer of Euronext and head of the Amsterdam exchange.
Instead, Euronext supervisory board members extended the contract of Theodore until 2007, and Moeller left.
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