The French government has approached banks and insurers about purchasing at least 34 percent of the Euronext stock exchange, though the nation’s banks have resisted the effort amid looming capital rules.
“On top of these objective considerations, it is also true that no financial institution is eager to please the government after the tax burden they imposed,” a senior banker said, according to Reuters.
French lenders and the government under President Francois Hollande have been at odds over a number of issues, including regulation and taxation. Opposition by the banks, however, has resulted in the easing of the crackdown.
The French government has sought to keep the exchange, which is now under transatlantic exchange NYSE Euronext, out of the hands of foreign parties, a move supported by banks. The banks maintain that such a situation could put them in a weaker position to win mandates to list major French firms, Reuters reports.
In December, IntercontinentalExchange agreed to purchase NYSE Euronext for $8.2 billion and committed to float Euronext’s activities in order to win regulatory approval. ICE seeks to list as much as 50 percent of Euronext, which includes Paris, Amsterdam, Brussels and Lisbon exchanges, in an initial public offering in order to refinance the acquisition.
“If Euronext ends up under non-European command, that would be bad news for European banks,” a source involved in the talks said, according to Reuters. “If all of a sudden, all CAC 40 companies are listed in Singapore or somewhere else outside Europe, French banks won’t be the best placed to conduct initial public offerings and capital raising. That would significantly dent their investment banking business.”
While sources have also said that the exchange would consider selling Euronext as a stock offering to potential buyers, including Deutsche Boerse and London Stock Exchange Group, the French government has expressed little interest in the option.
“You can see it as a resurgence of French nationalism,” one of the sources said, Reuters reports.