2nd UPDATE: UniCredit, Intesa Sell LSE Stakes At 960 Pence/Share

Wednesday, May 23, 2012

(Adds CEO comment in paragraph 5 and detail on potential buyers in paragraph 6.)


 
  By Giovanni Legorano 
  Of DOW JONES NEWSWIRES

MILAN (Dow Jones)--Italian banks Intesa Sanpaolo SpA (ISP.MI) and UniCredit SpA (UCG.MI) Wednesday said they sold their entire stakes in the London Stock Exchange Group PLC (LSE.LN) at 960 pence a share, helping to send the U.K. exchange's stock sharply lower.

Intesa said it sold 14.4 million existing ordinary LSE shares, representing GBP139 million in revenue. The bank said this translates into a net gain of around EUR105 million.

UniCredit said it sold around 16.6 million ordinary shares, corresponding to GBP159.5 million in revenue and generating a net gain of EUR120 million.

Morgan Stanley (MS) acted as bookrunner for the sale, which was announced Tuesday after the market close.

"It seemed the right moment to sell. It is part of the strategic plan we announced in November when we said we would sell some holdings," UniCredit Chief Executive Federico Ghizzoni said on the sidelines of an event in Paris.

A person familiar with the matter told Dow Jones Newswires that the buyers are mainly European and U.S. long-only funds and hedge funds.

Meanwhile, Italian daily MF-Milano Finanza reported Wednesday, without citing sources, that the buyers include current shareholders Borse Dubai Ltd. and Qatar Investment Authority.

The Dubai stock exchange owns a 20.6% stake in LSE, while the Qatari sovereign wealth fund has a 15.08% stake. The QIA declined to comment, while Borse Dubai wasn't reachable for comment.

Phil Dobbin at Execution Noble said the decision by the Italian banks to sell their stakes makes sense, as the two banks look to benefit from a recent boost in the stock exchange group's share price and raise capital ahead of the implementation of Basel III regulations.

"They are taking advantage of LSE's recent good set of results," Dobbin said. However, the banks might have sold their stake a little too early, as the market is currently undervaluing the company, he added. Execution Noble has a target price of 1,240 pence and a buy rating on the stock.

At 1305 GMT, the LSE was down 7.2% at 948 pence, UniCredit was down 2.1% and Intesa was down 3.3%.

Italian banks, like many across Europe, are keen to shed assets considered nonessential in an effort to build their balance sheets in the face of euro-zone uncertainties and stricter capital requirements.

The two Italian banks have been shareholders in the LSE since the LSE acquired Borsa Italiana in 2007.

- By Giovanni Legorano, Dow Jones Newswires, +39 342 7006537; Giovanni.Legorano@dowjones.com

(Max Colchester in London and Alex Delmar-Morgan in Doha contributed to this article.)