French grain growers eye stake in Euronext

PARIS, June 5 Thu Jun 5, 2014 11:55am EDT

PARIS, June 5 (Reuters) - French grain growers could take a stake in exchange group Euronext as part of its upcoming initial public offering in a bid to defend the Paris-based grains derivatives market, the head of the growers' investment fund Unigrains said on Thursday.

The move comes as Euronext is facing competition from CME Group Inc, the world's largest futures exchange operator, which is working on plans to launch a rival European milling wheat contract.

When it announced it would go ahead with the IPO last week, Euronext's owner IntercontinentalExchange Group (ICE) said a set of "anchor" investors would buy 33 percent and hold their stock for at least three years.

Unigrains, an investment fund created by French grain growers who are still its majority shareholders, could take a stake in addition to this group, Unigrains Chairman Philippe Pinta told Reuters on the sidelines of a news conference.

"Unigrains is interested in taking a stake in Euronext and is in a position to do so," Pinta said.

"The wheat futures contract has a strategic and structural importance for French and European production. We want it to be maintained in Paris with delivery in France," he added.

Driven by price swings in grain markets since 2007, Euronext's wheat futures <0#BL2:> have seen volumes rise steeply to make it a European benchmark and a credible counterpart to the CME-owned Chicago Board of Trade, the world's biggest grain exchange.

Pinta declined to detail how much Unigrains, which manages assets worth 1.1 billion euros ($1.5 billion), would be ready to invest in Euronext.

Euronext operates equity, fixed income and derivatives markets in Paris, Amsterdam, Brussels and Lisbon. Sources familiar with the matter have valued the exchange at 1.5 billion euros.

French industrial companies GDF Suez, Orange and Total will also take stakes in Euronext, a source familiar with the situation said on Wednesday.

($1 = 0.7341 Euros) (Reporting by Sybille de La Hamaide, editing by David Evans)

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