May 27, 2014 / 8:37 AM / in 4 years

UPDATE 2-ICE lines up European investors to buy a third of Euronext

* ICE secures anchor investors to buy 33 pct Euronext stake

* Euronext listing in Paris, Amsterdam, Brussels at first

* Listing seen valuing Euronext at more than 1.5 bln euros (Adds comments from Euronext CEO, details, background)

By Clare Hutchison

PARIS/LONDON, May 27 (Reuters) - IntercontinentalExchange Group (ICE) has lined up European long-term investors to buy a third of Euronext in its upcoming listing, aiming to allay local regulators’ concerns that the pan-European bourse could be snapped up by another foreign firm.

ICE said on Tuesday it was pressing ahead with the initial public offering (IPO) of Euronext, which two sources familiar with the matter said could value the European exchanges business at more than 1.5 billion euros ($2.1 billion).

The U.S. group had always intended to spin-off Euronext after its $11 billion deal last year to take over NYSE Euronext, which gave it control of the New York Stock Exchange.

But its plans have been complicated by concerns in countries such as France and the Netherlands that Euronext might fall into the hands of a foreign rival such as the London Stock Exchange and Nasdaq.

European regulators approved ICE’s takeover of NYSE Euronext on condition it kept a 25 percent stake in Euronext for three years, or found appropriate investors to replace it.

Sources familiar with the matter told Reuters last month that ICE had secured a group of European investors to buy 25-30 percent of Euronext.

The U.S. group said on Tuesday it had line up so-called “anchor” investors to take a 33 percent stake.

The investors, including French banks BNP Paribas and Societe Generale, Dutch firm ABN Amro, Belgian government investment vehicle SFPI, European clearing house Euroclear, and a unit of Portugal’s Banco BPI, will hold their shares for at least three years, ICE said.

They will be sold the shares at a limited discount to the IPO price, it added.

The IPO will be on Euronext’s Paris, Amsterdam and Brussels bourses in the first instance, with a later listing in Lisbon that will take place before the fourth quarter, ICE said.

It did not give further details on the timing or price of the IPO because the prospectus for the listing has to be approved by regulators. A source familiar with the matter said earlier this month the IPO was scheduled for June.

The listing and anchor investors will return decision-making at Euronext to Europe after it was centred in New York as part of NYSE Euronext - something which had prompted some market participants to leave Paris for London and elsewhere.

Euronext chief executive Dominique Cerutti told reporters on Tuesday that he was confident of strong investor interest in the IPO, despite a number of postponed listings and recent lacklustre market debuts in London.


Euronext operates equity, fixed income and derivatives markets in Paris, Amsterdam, Brussels and Lisbon. The business, which reported profit of $36 million in its first quarter, has also applied for recognised investment exchange status for its London bourse.

Cerutti said the listing would allow the business to reduce the footprint it inherited as part of NYSE Euronext, cutting costs and improving efficiency. It has already started that process, having renegotiated its contract with LCH.Clearnet, the clearing house majority-owned by the London Stock Exchange.

“There is significant potential for optimisation, meaning growing the top line,” Cerutti said.

He added the newly public company would focus on product innovation, particularly in derivatives, an initiative formerly led by Liffe - Europe’s second-largest derivatives exchange now held by ICE.

Cerutti said regulatory changes that are pushing more derivatives trading onto exchanges to improve transparency, bank capital constraints encouraging firms to look elsewhere for funding and positive economic trends in Europe should also provide tailwinds for the business.

As part of the IPO, both retail and institutional investors in the Netherlands, France, Belgium and Portugal will be offered a chance to buy shares, while institutional investors elsewhere can participate through a private placement.

ICE will also offer shares at a discount to the IPO price to all eligible Euronext employees in France, the Netherlands, Belgium, Portugal and Britain.

$1 = 0.7325 Euros Additional reporting by Andrew Callus in Paris and Freya Berry in London.; Editing by Mark Potter

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