Euronext CEO rules out another Allfunds bid in acquisition hunt

Allfunds

21/12/2023 06:30

By Pablo Mayo Cerqueiro
       LONDON, Dec 21 (Reuters) - Euronext  ENX.PA  is unlikely
to make another bid for Allfunds  ALLFG.AS  as it pursues
acquisitions that can grow and diversify revenues, its CEO
Stephane Boujnah told Reuters.
    The Paris-headquartered stock exchange group withdrew a 5.5
billion euro ($6 billion) bid for the Spain-based investment
fund platform in February, after news of the possible offer sent
Euronext's shares into a tailspin.
    "Acquisitions will remain a significant part of the Euronext
strategy, within certain strict criteria," former investment
banker Boujnah said in an interview this week.
    "The reasons why we decided not to do Allfunds remain. So,
it's not on top of the agenda for 2024," he added.
    Euronext's share price has recovered, but Allfunds' remains
significantly lower.
    This has prompted Allfunds to appoint advisers for a
strategic review that could result in a sale to a private equity
fund, sources familiar with the matter told Reuters.
    Allfunds declined to comment.
    Boujnah said Euronext – which operates bourses in Amsterdam,
Brussels, Dublin, Lisbon, Milan, Oslo and Paris – would consider
adding new exchanges in continental Europe, although he said
there are few left to consolidate.
    It will also explore acquisitions in adjacent sectors beyond
Europe, having considered deals in Britain, the United States
and some smaller transactions in Asia. 
    "We will definitely look at assets in those geographies,"
Boujnah, who has been Euronext CEO since 2015.
    Boujnah declined to comment on a Reuters report in September
that Euronext was considering bidding for U.S. securities
lending platform EquiLend.
    His update on Euronext's acquisition strategy come as stock
exchange groups look for new revenue streams to reduce their
reliance on more volatile listing and trading income.
    
    Global initial public offerings (IPOs) have had their worst
year since 2016 so far in 2023, Dealogic data shows, as rising
interest rates and economic uncertainty shook markets.
    However, Euronext said it is set to finish the year with 64
new listings, adding close to 50 billion euros in aggregate
market capitalisation. These include the dual listings of
Spanish transport giant Ferrovial  FERF.AS  in Amsterdam and
U.S.-based fashion group Coty  COTY.N .
    Last year, the group reported 83 listings with a combined
market value of 23 billion euros.
    "(International IPOs) don't go to London anymore, they go to
Euronext markets," he said.
    Asked about the risk of European firms moving their listings
to the U.S. in search of higher valuations or deeper liquidity,
Boujnah said the threat was bigger for the London Stock Exchange
Group  LSEG.L .
    "New York is a problem for London, not for Europe," he said.
    "The main tension and the main problem of the attractiveness
of New York has been for UK-based companies so far. For the
moment, I don't see a risk of large European-based (firms)
considering the same move."
    The British capital is seeing a string of large firms shift
their listings across the Atlantic, including construction
materials group CRH and packaging firm Smurfit Kappa, as well as
others pursuing IPOs abroad, such as chipmaker Arm Holdings.
    The UK is working to attract more IPOs by easing listing
rules and encouraging investment into local start-ups. This week
 Britain's markets watchdog proposed a single entry point to
simplify and speed up company listings, in the biggest shake up
of its kind in three decades.
    Continental Europe has not been immune, however. German
sandal maker Birkenstock debuted on the New York Stock Exchange
in October, while Ferrovial also wants a U.S. listing.
    The European Union has work to do to make its capital
markets more competitive, including establishing a single
markets watchdog akin to the U.S. Securities and Exchange
Commission (SEC), said Boujnah.
    "We need to proceed to a system of single supervision," he
said. "There is a case and there is a momentum that is going in
the right direction towards the emergence of a European SEC."
    ECB President Christine Lagarde called for a European SEC
and a consolidated capital market in a speech last month as a
way to unlock financing for the bloc.
($1 = 0.9137 euros)  

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 (Reporting by Pablo Mayo Cerqueiro in London; Additional
reporting by Amy-Jo Crowley, Andres Gonzalez and Mathieu
Rosemain; Editing by Anousha Sakoui and Alexander Smith)
 ((Pablo.MayoCerqueiro@thomsonreuters.com;))