Euronext withdraws its 5.5 billion bid for Allfunds


The exchange operator plunged 10% in just six sessions, while the Spanish company soared almost 13%.

Euronext has withdrawn its bid for Allfunds, among other reasons, because of unsatisfactory due diligence and the stock market punishment that investors inflicted on the pan-European exchange operator’s share price after the announcement. It risked being worth the same or less than its potential prey.

Euronext’s stock market plunge -10% in just one week- has been the factor that has dynamised the deal. But it was not the only one. According to the Allfunds statement, it was the board of the Spanish investment fund platform that put the brakes on Euronext’s landing because the terms of its proposal were “inadequate”. However, Euronext claims that its offer “was not rejected” and was rather withdrawn after the due diligence process that has been carried out.

Be that as it may, the operator of the Paris, Amsterdam, Milan, Brussels, Lisbon, Dublin and Oslo stock exchanges has withdrawn its €5.5 billion bid to buy the fund distributor.

Euronext, which competes directly with major players such as Deutsche Boerse and London Stock Exchange, submitted a preliminary proposal to buy Allfunds on February 22 with the aim of diversifying its business.
In its plan to take over Allfunds, the exchange operator proposed to pay €8.75 per share, at a rate of €5.69 in cash plus 0.04059 new shares.
Euronext had also reported that it had been in talks with Hellman & Friedman and BNP Paribas, which together own 46.4% of Allfunds’ share capital, to obtain their support.

But Euronext shares did not respond well to the deal, falling 10% in just six trading sessions between February 22 and 28, the day before the breakdown of the talks came to light.

In that period, Euronext’s capitalisation fell from around €8.2 billion to just under €7.4 billion.

By contrast, Allfunds’ cumulative rise of 12.75% raised the platform’s market value to €5.2 billion. At some points, its capitalisation even exceeded the amount offered by Euronext.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.