January 30, 2020 / 2:43 PM / 17 days ago

Italian payments group SIA taps IPO advisers; Nexi deal still an option: sources

MILAN (Reuters) - Italian payment services group SIA is close to appointing an adviser for a potential Milan stock exchange listing while a tie-up with bigger rival Nexi NEXI.MI also remains on the table, two sources close to the matter said on Thursday.

FILE PHOTO: The logo of Italian payments group Nexi pictured inside its headquarters in Milan, Italy, March 28, 2019. REUTERS/Alessandro Garofalo/File Photo

An initial public offering (IPO) is only of the one options for state-controlled SIA alongside any Nexi deal to build an Italian champion in the fast-growing payments sector.

Markets have been speculating about a possible merger since Nexi listed last April in one of Europe’s biggest IPOs of the year.

Nexi’s private equity owners Advent International, Bain Capital and Clessidra said in December that contact with SIA had not progressed beyond a preliminary stage.

One source familiar with the matter has said that valuation issues were among the sticking points.

SIA and Nexi declined to comment on Thursday.

A year ago SIA Chief Executive Nicola Cordone said the group was considering an IPO that could value the company at 3.5 billion euros ($3.9 billion).

Cordone said the company wanted to expand in Europe, where the non-cash payments market was 134 billion euros in 2017, according to a Capgemini report.

The head of state lender CDP, Fabrizio Palermo, said in a November newspaper interview that it had raised its stake in SIA to 83% to support the group’s efforts to take part in consolidation within the payments sector.

He said an IPO could help CDP to “extract the most value” from its stake ahead of possible merger deals.

Though Nexi and SIA compete in some areas, their businesses are mostly complementary, with SIA focused on platforms that are also used by Nexi as a customer.

“A merger with SIA would be strategically positive for Nexi as it would allow the company to increase its presence in the value chain by integrating one of the two current suppliers of processing services,” said Equita analyst Gianmarco Bonacina.

Reporting by Elisa Anzolin; Editing by David Goodman

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