UniCredit, Intesa Sold LSE Stakes To Boost Capital

Italian banks UniCredit and Intesa Sanpaolo said on Wednesday they had sold their combined 11.5 percent stake in the London Stock Exchange for 960 pence per share, raising 370 million euros.

The price was at the bottom end of the 960-1,000 pence range provided by the offer terms sheet on Tuesday, valuing UniCredit’s 6.1 percent stake at 197.6 million euros ($252 million) and Intesa’s 5.4 percent holding at 172.5 million euros.

UniCredit said the sale would boost its net income by around 120 million euros ($153 million), while Intesa Sanpaolo put the capital gain at about 105 million euros.

UniCredit and Intesa were the LSE’s third- and fourth-biggest shareholders, having inherited the stakes after the London bourse bought its Milan rival in 2007 in a 1.6 billion euro deal.
The two banks have now sold the whole of their LSE holdings, which were placed through an accelerated book building, with Morgan Stanley acting as bookrunner.

The sale price was 5.6 percent below the LSE’s closing share price on Tuesday of 1,017 pence. LSE shares were down 7 percent by 0846 GMT on Wednesday, and the stock was the most actively traded in the FTSE mid-cap index.
“There may be some short-term pressure on the share price, but the sales will increase the free float, which is probably a good thing,” said Richard Perrott, an analyst at Berenberg Bank.
With the euro zone’s debt crisis eating away at their profits and their capital base, Italian banks and many of their European peers are retrenching to focus on core operations and shedding non-strategic assets to boost their financial strength.

The LSE stake was not among UniCredit’s core holdings, the bank’s CEO Federico Ghizzoni said in Paris on Wednesday.
“It seemed the right moment to sell. It is part of the strategic plan we announced in November when we said we would sell some holdings,” Ghizzoni told reporters.
Britain’s Barclays said earlier this week it was selling its near-20 percent stake in U.S. asset manager Blackrock, worth $6.1 billion.

But the exit from the LSE of Italy’s top two lenders also underscores the Italians’ fast diminishing influence in the combined entity, which at the time of the takeover had been hailed as creating strong synergies.
When the deal – which some viewed as a move to make it harder for Nasdaq to buy the LSE – was announced, Italian investors had a 28 percent stake in the enlarged group.

They have gradually sold shares and, after UniCredit’s and Intesa’s sales, they will hold just above 3 percent.
Massimo Capuano, one of the architects of the sale of the Italian bourse and until then the most senior Italian executive at the LSE, left his job as deputy chief executive of the exchange in 2010 after clashing with CEO Xavier Rolet.

Earlier this year the head of Italy’s market regulator Consob, Giuseppe Vegas, said the takeover of Borsa Italiana by the LSE “has not fulfilled expectations either in Italy or London” in terms of stimulating cross-border capital flows or increased investments in Italian companies.
The LSE’s leading investors are now Borse Dubai Ltd, with 20.6 percent, and the Qatar Investment Authority, with 15.1 percent, Reuters reported.