IG offers grey market contract for Poste Italiane IPO

MILAN Wed May 21, 2014 3:48pm EDT

MILAN May 21 (Reuters) - Financial spread betting firm IG Group is offering a grey market contract that allows traders to bet on Poste Italiane's market value at the close of its first trading day, now seen at 12.5 billion euros ($16.4 billion).

Earlier this year, Fabrizio Saccomanni, finance minister in the last government, said the sale of a 40 percent stake in the post office could raise 4.0-4.8 billion euros, a price analysts said would value the group at around 10-12 billion euros.

Italy approved the sale plan last week as part of a wider privatisation drive to cut public debt. The sale is expected to be wrapped up this year.

The first bet using the grey market was placed at 12 billion euros, the top of the indicative range, said Vincenzo Longo, a strategist at IG.

"Now it's rising, we are at 12.5 billion (euros)," Longo said. This is the first time IG has issued a pre-IPO contract on the grey market for an Italian company, he added.

"It's a good way to figure out what the market expects from this IPO," Longo said.

IG has offered the same type of contracts for the IPOs of social network giants Facebook and Twitter, Britain's Royal Mail, and still has one on offer for the planned IPO of China's Alibaba Group Holding Ltd IPO-ALIB.N.

Poste Italiane, one of Italy's biggest employers with 146,000 employees, provides a range of services as well as traditional mail delivery with its financial arm BancaPosta counting as Italy's sixth biggest bank. ($1 = 0.7318 Euros) (Reporting by Elisa Anzolin; writing by Agnieszka Flak; editing by Keiron Henderson)