Euronext, SIX launch bidding war for Madrid bourse

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Pan-European stock market operator Euronext and Switzerland’s SIX sparked a bidding war for Spain’s BME, with both trying to buy up one of Europe’s last standalone stock exchanges.

SIX has offered to buy BME for €34 per share, implying a total equity value of €2.843bn (£2.4bn), a large premium over BME’s market capitalisation of just over €2bn before the offer was announced.

SIX Chief Executive Jos Dijsselhof says the deal was “very much” about growing the revenues of both businesses.

The Spanish bourse, whose shares rose by more than a third in early trading, said the Swiss offer “reasonably reflected” its current value.

With European sector leaders Deutsche Boerse and London Stock Exchange effectively too big to consolidate without raising serious competition concerns, exchange mergers are focusing on smaller players, with Euronext having already scooped up the Dublin and Oslo exchanges.

Shares of BME, among the smallest of Europe’s exchanges, were up 37% at €34.8 by 1040 GMT.

Analysts at Spanish bank BBVA says: “We believe the terms of the offer to be difficult to refuse.”

Euronext, which has a market cap of around €5bn, had denied earlier this month that it was bidding for BME. It has not disclosed an offer price. Taking over BME would not dramatically alter the overall exchange landscape, but would help to buttress SIX or Euronext.

SIX, whose offer for BME is a friendly one, says its proposed purchase would be financed through a combination of existing cash resources and access to capital markets.

BME said it would keep its current business activities, Spanish headquarters and local strategy for a four-year transitional period at least.

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