The Italian digital payments front is enriched with a new chapter. The Board of Directors of CDP Equity, holding company of the Cassa Depositi e Prestiti Group, has resolved the possibility of increasing the stake in Nexi within the maximum limit of 29.9%, marking a significant transition for the shareholding structure of the paytech of Piazza Affari. The current share held is approximately 19%, a position that already makes Cdp Equity the company’s first institutional shareholder, while the first shareholder in general remains the Hellman & Friedman fund with 22.23%, with a high free float of 58.6%.
The tools of the operation
The strategy approved by the board provides for a complex architecture. As part of this strategy, Cdp Equity has approved the subscription of derivative contracts for up to 8% of Nexi’s share capital, which may be settled in shares, if the necessary authorizations have been obtained. Furthermore, participation can also be increased through direct purchases by Cdp Equity. The holding company was keen to clarify a decisive element in terms of market discipline: Cdp Equity does not intend to launch a public purchase offer on Nexi shares, while the operation will be subject to the issuing of the regulatory authorizations necessary for exceeding the relevant thresholds.
In the operation, Cdp Equity was assisted by Mediobanca Banca di Credito Finanziario, JPMorgan and PricewaterhouseCoopers Business Services as financial advisors and by Hogan Lovells as legal advisor.
The industrial rationale
In the reasons released to the market, Cdp Equity underlines the systemic value of the asset. The company believes in a strong innovative and industrial evolution of Nexi, which already processes 1,800 billion euros of digital transactions in over 25 countries, and which will be able to play a key role in the European development of a technological infrastructure to support the digitalisation of money. The objective of the operation, according to sources close to CDP, is to contribute to the creation of a leader in digital infrastructures capable of competing on a European scale. The increase in participation also represents the first significant operation for Fabio Barchiesi since he was appointed CEO of CDP Equity last October, and is part of the broader community process of reducing dependence on US operators in payment circuits.
The market reaction
The response from Piazza Affari was immediate. The Nexi stock gained around 5% in early trading, rising to a maximum of 3.577 euros and remaining in the lead among the components of the Ftse Mib; However, the balance since the beginning of the year remains negative, with a drop of 14% compared to the levels at the beginning of January. The FTSE MIB index is trading in positive territory, up by more than 1% in the 50,000 point area. The decision follows the exit of the Advent and Bain Capital funds from Nexi’s capital, which took place on May 12th, which reconfigured the balance of the shareholder base.
Analysts’ comments
Major brokerage houses welcomed the move. Equita analysts maintain their hold recommendation with a target price of 3.1 euros, considering the increase in Cdp’s share an element of support for the stock. WebSim Intermonte also underlines how a possible increase in participation by Cdp would stabilize and support the share price, especially considering the high level of short positions on the stock, highlighting however that the speculative attractiveness of the move is limited, since the exclusion of a takeover bid by Cdp also reduces the possibility of a private equity offer aimed at delisting. For analysts, the operation helps to define the current level of the stock as a credible floor, making a scenario of institutional disinterest in Nexi less likely.
