Reuters: Regulatory News: UPDATE 2-Italy's UniCredit, Intesa selling stakes in LSE

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UPDATE 2-Italy's UniCredit, Intesa selling stakes in LSE May 22nd 2012, 19:21 Tue May 22, 2012 3:21pm EDT * UniCredit owns 6.1 percent of LSE, Intesa 5.4 percent * Offering shares at 960 pence to 1,000 pence - term sheet By Silvia Aloisi and Kylie MacLellan MILAN/LONDON, May 22 (Reuters) - Italian banks UniCredit and Intesa Sanpaolo said they were selling their combined 11.5 percent stake in the London Stock Exchange (LSE), as they both move to shed non-core assets and boost their capital. In separate statements on Tuesday, UniCredit and Intesa said they would place their respective stakes with institutional investors. UniCredit has 6.1 percent and Intesa 5.4 percent of the LSE, which bought the Milan bourse in 2007, making them the LSE's third and fourth biggest shareholders. "It was a non-strategic asset for both banks," said one source close to the situation. "The move is consistent with the strategy of refocusing on core business and also nets a capital gain," the source, who declined to be named, said. The banks are offering their shares at between 960 pence and 1,000 pence per share, according to a term sheet for the deal seen by Reuters. That is a discount of between 1.7 percent and 5.6 percent to Tuesday's closing share price of 1,017 pence. At the top of that range, UniCredit's stake is worth around 165 million pounds and Intesa's around 146 million pounds. LSE's shares have lost 9.2 percent over the past month, but are up 21.9 percent over six months. "LSE's shares have had a decent run recently, which the banks are probably hoping to capitalise on," said Richard Perrott, an analyst at Berenberg Bank. "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." Increasing the number of shares available for trading boosts the liquidity of a stock and makes it more attractive to investors. 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. Britain's Barclays said on Monday 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 1.6 billion euros 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; 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 investment 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. Morgan Stanley is acting as bookrunner on the sales for both banks. The LSE declined to comment. Link this Share this Digg this Email Reprints

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