(Adds more detail)
LONDON, Sept 18 (Reuters) - London Stock Exchange entered
exclusive talks on Friday to sell Borsa Italiana to France's
Euronext, seeing off competing bids from Deutsche
Boerse and Switzerland's Six.
The LSE is selling the Milan stock exchange as part
of regulatory remedies for its $27 billion purchase of data
provider Refinitiv, which is 45% owned by Thomson Reuters
, parent company of Reuters News.
However, the deal is politically sensitive in Rome because
of concerns about who could take control of Borsa Italiana's
bond platform, which handles trading of Italy's government debt.
Euronext's bid won round both the LSE and Rome, despite
sources saying Six had initially submitted the highest offer, as
it teamed up with Italy's Cassa Depositi e Prestiti and Intesa
Sanpaolo in order to gain Italy's buy-in.
Both CDP and Intesa will become shareholders in the French
exchange operator, if the bid for Borsa succeeds, by subscribing
to a proposed capital increase.
"The proposed combination of Borsa Italiana and Euronext
would create a leading player in continental European capital
markets," Euronext said in a statement.
CDP would have a seat on Euronext's supervisory board, with
a second Italian candidate proposed as an independent board
member and become chairman of the combined group.
"Borsa Italiana would maintain its current functions,
structure and relationships within the Italian ecosystem and
preserve its Italian identity and strengths," Euronext said.
Six noted the LSE announcement and had no further comment.
Deutsche Boerse did not immediately respond to requests for
comment.
(Reporting by Muvija M in Bengaluru, Rachel Armstrong and Huw
Jones in London, Mike Shields in Switzerland and Tom Sims in
Frankfurt; Editing by Patrick Graham, Jason Neely and Alexander
Smith)
