November 29, 2019 / 8:12 PM / 16 days ago

Swiss exchange operator SIX adds Spanish banks to court BME -sources

MADRID/LONDON, Nov 29 (Reuters) - Swiss stock market operator SIX has started working with Spain’s biggest banks as it begins its charm offensive to convince local regulators of the merits of its 2.84 billion euro ($3.13 billion) bid for Spanish bourse BME, three sources told Reuters.

Santander, BBVA and Caixabank have been added to SIX’s advisory line-up, the sources said, speaking on condition of anonymity.

The three banks were the BME exchange’s biggest investors before and immediately after its listing in 2006.

They will work closely with Credit Suisse - which remains SIX’s leading adviser and financing bank - and will be in charge of finetuning the deal, the sources said.

Santander will act as financial adviser, while Caixabank will help with the financing, one of the sources said.

BBVA will act as an “agent bank” in charge of more technical aspects of the transaction including winning shareholders’ support, the source said.

“It is a vote of confidence on SIX’s merger plan,” he said.

BME, SIX, Santander, BBVA and Caixabank declined to comment.

The deal to buy one of Europe’s last standalone stock exchanges values BME at 34 euros per share. That implies a hefty 34% premium over BME’s market capitalization of just over 2 billion euros before the offer was announced.

It comes at a time when the industry is struggling with lower fees and declining revenues. The deal is being closely monitored by BME’s European rivals, including France’s Euronext , the sources said.

While BME has not formally recommended the SIX offer to its shareholders, it has called the potential deal “amicable”, with BME’s Chief Executive Javier Hernani saying the board had welcomed both SIX’s strategic plan and the price, which was “presented in a friendly way.”

The deal will also need the blessing from the Spanish government, which is expected to seek reassurances that local jobs would not be slashed if trading migrates to a central platform run by SIX.

LENGTHY REVIEW

Spanish regulator CNMV said on Friday it had admitted SIX’s request to review the takeover plan, without saying when a decision would be made.

CNMV may take three to five months to carry out the review, two sources close to the deal said, meaning the acceptance period for investors will only start in the middle of 2020 in the event of a favourable decision by the Spanish watchdog.

That would give French stock market operator Euronext more time to submit a counter-bid, one of the sources said.

Euronext said on Nov. 18 it was in talks with BME over a possible takeover offer, just hours after SIX unveiled its plan.

Euronext has turned to Rothschild to explore a rival proposal, another source said, but its bidding plan has yet to be made public.

Euronext and Rothschild declined to comment.

$1 = 0.9073 euros Reporting by Jesús Aguado and Pamela Barbaglia; additional reporting Maya Nikolaeva; editing by Ashifa Kassam and Rosalba O'Brien

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