MILAN Reuters - The buyout of Atlantia will reduce the value of the Milan bourse by 19 billion euros $19.5 billion and bring to 12 the number of companies that leave the stock exchange this year, fuelling fears about its standing.
Legislators and regulators want to reverse the trend and strengthen the role of the 200-year-old Borsa Italiana at the heart of Italian business.
Barbara Lunghi, head of equity listings at Euronext, believes that the scrutiny of being a listed business and having external investors pushes businesses to innovate and develop.
Lunghi said that it gives companies that extra gear that helps to drive growth.
Many family-owned businesses in Italy are unwilling to relinquish control by listing their businesses unless they need cash for M&A or other expansion strategies because of the problem.
The market watchdog Consob approved measures this year to simplify procedures for approval of IPO prospectuses, including allowing them to be submitted in English.
Italy started to study how to address the issues holding back the country's capital markets, even though the process was frozen by a change in government after a right-wing coalition won elections at the end of September.
So far this year 11 companies have abandoned Euronext Milan, including the Agnelli family's holding company Exor, which moved to the Amsterdam bourse in line with where it is legally registered.
Atlantia's road and airport operator is leaving after a buyout by the Benetton family and Blackstone passed the 90% support threshold on Thursday.
After a merger with Switzerland's Dufry, Autogrill is expected to be delisted, and the fate of shoemaker Tod's remains uncertain after the failure of a buyout offer by its main shareholder.
CNH Industrial, whose shares are listed both in Milan and New York, is looking at the possibility of putting an end to its dual listing and focusing on the NYSE.
As low prices and availability of cheap money made it convenient to take listed companies private, it was a trend shared by many European stock exchanges.
Four companies have joined the main Euronext Milan market this year, including truckmaker Iveco, which was the result of a spin off. Two other companies have upgraded from the smaller Euronext Growth Milan.
The situation is healthier for Euronext Growth Milan, a market that is dedicated to small and medium-sized enterprises with minimal access requirements. The main market has lost 268 listed companies over the past 20 years and only gained 185, according to Intermonte research published in March. The less regulated SME market has attracted 263 listed companies and seen 68 delistings.
Andrea Beltratti, professor of political economy at Milan's Bocconi University, said that the fact that there are relatively few listed companies has its roots in the country's history.
Beltratti said Italy lacks a long tradition of equity finance and its economy has been relatively weak for the last 20 years.
Companies prefer to ask them for funding because of the heavy presence of banks and other financial intermediaries in Italy.
The ease of collecting capital and reputational position is one of the benefits of being listed, but there are also costs associated with regulation, the need for transparency, and the many interactions with investors Beltratti said.
Beltratti said I don't think these are issues that can be solved in months or even years because they are a cultural issue. $1 0.9755 euros