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Euroclear mulls IPO, private placement: ceo
Posted on Monday, 10 June 2019 13:50
Euroclear has ruled out the possibility of a merger even while evaluating two alternatives for a fundamental transformation, chief executive (ceo) Lieve Mostrey told Reuters. The Belgian business is the holding company for a group of companies providing settlement and custody of domestic and cross-border securities for bonds, equities and derivatives to investment funds. Operating entities include Euroclear Bank, and units based in Finland, France, Netherlands, Sweden and the UK and Ireland, and together they settled the equivalent of EUR 791,000 billion in securities transactions in 2018. The company formally moved from UK to Belgium by the end of 2018 in the face of Bexit in order to guarantee its seat remains located inside the European Union. Some recent sales of shares in Euroclear has made several existing stockholders sit up and take notice of how they could take their money off the table. In January 2019, London Stock Exchange Group bought a 4.9 per cent stake and gained a board seat, some 15 months after Intercontinental Exchange acquired 4.7 per cent from RBS. Reuters noted Euroclear hired Goldman Sachs in March to weigh options on introducing long-term investors via a private placement or by opening up its capital through of an initial public offering (IPO). Mostrey told the news provider plans to sell shares are likely to attract pension and sovereign wealth funds, given the company’s steady dividends. In the last five years, dividends have grown from EUR 31.50 per share in 2014 to EUR 55.00 in 2018 and shareholders’ equity has risen from EUR 1.73 billion in 2017 to EUR 1.89 billion. “An orderly structured process can help to put big and small shareholders that want to sell a bit more at par in the process. “We believe we will continue to have a diverse shareholding. As soon as we would be owned by one party, it would be a threat to our business,” the ceo told Reuters. She added a merger with a third party is not an option, especially as any such deal would come against intense scrutiny from the European Union, given the company’s importance. © Zephus Ltd