PARIS: France’s unloved financial transaction tax is hampering its efforts to persuade local institutions to buy stakes in Paris stock exchange operator Euronext and keep it under French influence after its expected spin-off next year.
Battling to halt a long-term drift of business away from Paris to rival financial centres such as London and Frankfurt, President Francois Hollande’s government is urging local market players to signal their interest in Euronext, which also runs the Amsterdam, Brussels and Lisbon bourses.
But while Finance Minister Pierre Moscovici said last week he was confident negotiations would result in a deal, others do not share his optimism. “If Paris’s political and business communities do nothing, then, even with an IPO, a takeover of Euronext by one of the three big contenders is unavoidable,” Gerard Rameix, president of French market regulator AMF said, citing US-based Nasdaq OMX, Germany’s Deutsche Boerse and the London Stock Exchange (LSE) as potential predators.
Nasdaq, LSE and Deutsche Boerse declined to comment.
Earlier this year Nasdaq OMX Chief Executive Robert Greifeld had said the company would consider a bid for Euronext if the opportunity arose. Atlanta-based IntercontinentalExchange Inc, which owns a network of exchanges and clearing houses, has made clear that it plans to spin off Euronext following this year’s $10-billion-plus merger with NYSE Euronext.
Once based in Paris and Amsterdam, Euronext saw decision-making shift from the French capital to New York in 2006 when it was bought by NYSE, a move that had already prompted some market participants to leave Paris for London and elsewhere.
French banks, such as Societe Generale, Credit Agricole and BNP Paribas SA, as well as insurer AXA have been approached to take a stake in Euronext, whose IPO is expected to be worth between ¤1bn and ¤1.5bn ($1.4-2.1bn)
BNP Paribas, Credit Agricole and Axa declined to comment. Officials from Societe Generale were not immediately available to comment. The chief executive of Axa, Henri de Castries, told Reuters in April that he was not interested in buying Euronext.
Euronext Chief Executive Dominique Cerutti told Les Echos newspaper recently that ICE wanted to put together a stable core group of shareholders and hold onto a 25 percent equity interest alongside other shareholders - for example banks.
But sources close to the discussions say negotiations are proving difficult because of anger among France’s financial sector players over a domestic tax on financial transactions introduced last year, and the prospect that euro zone will also impose one.
Reuters
