Top investor in Italy's Nexi cuts stake as M&A looms

MILAN (Reuters) - The top investor in Nexi has sold 8.8% of the Italian payments group, cutting its holding in a move seen by investors as easing the way for a long-awaited potential merger with rival SIA.

Nexi CEO Paolo Bertoluzzo said this month talks with SIA to create an Italian payments giant continued. Sources have told Reuters negotiations will soon focus on key valuation issues.

Mercury UK, a vehicle of private equity firms Advent, Bain Capital and Clessidra, said on Wednesday it had cut its stake in Nexi to 43.3% after selling 55 million shares for 781 million euros.

A banker close to the sale said demand from more than 100 investors, mostly British and U.S., had totalled 2.8 billion euros, with the top 20 buyers accounting for around three quarters of the order book.

Through Nexi investors can bet on Italy’s underdeveloped electronic payments market, where the pandemic is seen speeding up growth by encouraging online shopping and generally a switch away from cash.

The banker said investors had also taken into account the possibility of a merger with SIA, which analysts say would be made easier by a smaller presence of Nexi’s private equity owners.

SIA is controlled by state-owned lender CDP which would eventually emerge as the key investor in a combined Nexi-SIA group. Such an entity would control around 70% of the Italian payments market, Jefferies estimates.

Mercury’s holding in Nexi will shrink further when it closes an agreed 9.9% stake sale to Intesa Sanpaolo.

Mediobanca Securities analysts calculated CDP could control 18% of an eventual merged group and Mercury around 26%.

Barclays, Goldman Sachs and HSBC managed the share offering.

By 1007 GMT shares in Nexi traded down 5.5% at 14.45 euros each, above the stake sale price of 14.2 euros.

Shares are up around 60% from Nexi’s market debut level in April 2019.

(This story fixes typo in fifth to last paragraph)