Euronext (ENX.PA) has withdrawn its 5.5 billion euro ($5.8 billion) indicative offer to buy fund distribution firm Allfunds (ALLFG.AS), boosting the exchange operator's shares while sending Allfunds' lower.
Euronext, home to the Paris, Amsterdam and Milan stock exchanges, did not say why it had dropped the cash-and-shares bid, but a source close to the matter said insufficient synergies, a drop in Euronext shares since the offer was made and uncertainties over timing and financing were all factors.
The Allfunds board considered that the terms of the proposal were inadequate. Allfunds subsequently entered into discussions on terms with Euronext but no agreement was reached and discussions have been terminated," Allfunds said on Wednesday, after Euronext withdrew its offer.
Allfunds' shares slumped around 13% to 7.21 euros in early trading, while Euronext shares rose around 5%.
"Allfunds shares were trading around 7.20 euros before news of Euronext's unsolicited indicative offer became public. To our mind, this is unlikely to represent a floor for the shares now that deal talks have collapsed," wrote brokerage Jefferies.
The exchange operator, which competes in Europe against bigger rivals Deutsche Boerse (DB1Gn.DE) and London Stock Exchange Group (LSEG.L), submitted a preliminary offer to buy Allfunds on Feb. 22, aiming to diversify its business.
Euronext's indicative offer amounted to 8.75 euros per share and consisted of 5.69 euros per share in cash plus 0.04059 new shares.
While the offer valued the Madrid-based Allfunds above its market value of 4.6 billion euros at the time it was made, it was below the 7.2 billion euros the distribution firm reached in its Amsterdam listing in 2021.
Over the past few years, Euronext has been involved in a series of acquisitions, including the integration of the Milan bourse, which it bought in a 4.4 billion euro deal in 2021.
Hellman & Friedman is Allfunds' largest shareholder with a 34.3% stake, while BNP Paribas (BNPP.PA) holds 12.1%. Credit Suisse (CSGN.S) sold an 8.6% stake in Allfunds in October.
