Atlantia exit highlights Milan’s battle to retain market heavyweights

  • Atlantia is written off after the acquisition
  • Many Italian companies are moving away from the stock market
  • The authorities are seeking to strengthen the position of the Italiana Stock Exchange

MILAN (Reuters) – The purchase of Atlantia (ATL.MI) will slash another 19 billion euros ($19.5 billion) from the value of the Milan Stock Exchange and bring to 12 the number of companies leaving the exchange this year. fueling concerns about its standing.

Lawmakers and regulators want to reverse the trend and cement the role of the 200-year-old Italian Stock Exchange at the heart of Italian business.

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Barbara Longhi, head of listing Italy shares at market owner Euronext, argues that the scrutiny of being a listed company and the presence of outside investors pushes companies to innovate and develop.

“It gives companies additional equipment to help drive growth,” said Longi.

But the problem has deep roots, as many family-run companies in Italy are unwilling to relinquish control by listing their companies unless they need cash for mergers and acquisitions or other expansion strategies.

Market watchdog Consop approved measures this year to streamline the procedures for approving IPO prospectuses, including allowing them to be submitted in English.

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Also aiming to speed change, Italy this year began examining how to reform listing, voting and other rules to address problems crippling the country’s capital markets — though that process was put on hold by a change in government after a right-wing coalition won. Elections at the end of September.

Milan exodus

So far this year, 11 companies have abandoned Euronext Milan, including the Agnelli family’s holding company Exor (EXOR.AS), which moved to the Amsterdam Stock Exchange in line with where it is legally registered.

Atlantia A/C is leaving after a buyout by the Benetton family and Blackstone crossed the 90% support threshold on Thursday.

Travel services company Autogrill (AGL.MI) is expected to be delisted following a merger with Swiss company Dufry, and the fate of shoemaker Tod’s (TOD.MI) remains uncertain after a failed takeover bid by a major shareholder.

CNH Industrial (CNHI.MI), whose shares are listed in both Milan and New York, is evaluating the possibility of ending its dual listing and focusing on the New York Stock Exchange.

Taking listed companies private is a broader trend shared by many European exchanges, as low prices and the availability of cheap funds made it convenient.

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Few newcomers

On the plus side, four companies have joined Euronext Milan’s main market this year, including truck maker Iveco (IVG.MI), which was the result of a spin-off. Two other companies have been upgraded from the smaller Euronext Growth Milan.

The situation is even more true for Euronext Growth Milan itself, which is a marketplace dedicated to small and medium-sized companies with minimal access requirements. In 2022, it counts 18 new listings, but the overall market capitalization is very low.

The scarcity of Italian IPOs is a perpetual issue.

Over the past 20 years, the primary market has lost 268 listed companies and gained only 185, according to Intermonte research published in March. In contrast, the less regulated small and medium companies market attracted 263 listed companies and witnessed the delisting of 68 companies.

cultural issue

The fact that there are relatively few listed companies is rooted in the country’s history, said Andrea Beltratti, a professor of political economy at Bocconi University in Milan.

Beltratti said that Italy lacks a long tradition of equity financing and that its economy has been relatively weak over the past 20 years.

The heavy presence of banks and other financial intermediaries in Italy replaced the role of markets, so companies often preferred to ask them for financing.

“The benefits of listing are the ease of raising reputable (status) capital, but there are also costs associated with regulation, the need for transparency, and the many interactions with investors,” Beltratti said.

Beltratti added, “I do not think that these issues can be resolved in months or even years because it is a cultural issue.” ($1 = 0.9755 euros)

(Reporting by Elisa Anzulin). Drawing by Danilo Masonic; Editing by Keith Ware and David Holmes

Our Standards: The Thomson Reuters Trust Principles.

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