(Finance) – TheEuronext Growth Milan (EGM), the Italian Stock Exchange market dedicated to SMEs with high growth potential, “works and could be seen as a showcase to attract external investors“. This is one of the conclusions reached by the Research Office Ambromobiliare after an analysis of the high number of delistings in Italy. The study by the consultancy company, specialized in Financial Advisory services and also listed on EMG, essentially seeks to respond to those who maintain that a high number of delistings indicates that the stock markets do not work in supporting the growth of companies.
IPO and delisting in Italy
In the period January 2020 – September 2023 are 70 companies left the stock exchangewith a overall capitalization loss of 68 billion of Euro. In the same period, 128 companies were listed on the stock exchange, bringing a total capitalization of 23 billion euros to the market.
The phenomenon of delisting has been of interest mainly the Euronext Milan price list (EXM, ex-MTA), where the 44 broadcasters have been delisted (including the STAR segment), with a consequent loss of 66 billion euros in capitalisation. On the contrary, the IPOs mainly affected the Euronext Growth Milan market (EGM, ex-AIM Italia), where 113 companies were listed with a total market cap of 8 billion euros.
Main price list vs EGM
In the period considered, the EXM marketincluding also the STAR segment, show a small number of entries (15, of which 13 on EXM and 2 on the STAR segment) with a total capitalization of 15 billion euros, and a significant volume of exiting companies (44, of which 28 on EXM and 16 on the STAR), with a capitalization loss of 66 billion euros. For EXM and STAR the net balance between admissions and delisting is negative, equal to -29, and overall the market has lost 52 billion euros in capitalisation.
On theEGM there were 113 new listings, with an overall market cap of 8 billion euros, and 26 delistings, with a loss of market cap of 2 billion euros.
The types of delisting
Of the total companies delisted in Italy, i.e. 70, the most cases occurred through OPA (50).
In 7 cases, the companies were delisted following one fusion with another listed or unlisted company (among the most important cases is the merger between FCA and PSA which gave rise to Stellantis; in 9 cases, the delisting occurred following the decision taken by theassembly of the shareholders (of these in 4 cases on EGM it involved the liquidation of a SPAC, following the failure to achieve the proposed business combination); in another 3 cases, the delisting occurred following the decision taken by the Italian Stock Exchange (1 case – Fabilia Group – concerned the company’s inability to find a Euronext Growth Advisor; 1 case – Cose Belle d’Italia – related to the company’s inability to achieve the corporate purpose due to the depletion of the company’s net assets; 1 case – Biancamano – is due following the company’s admission to the extraordinary administration insolvency procedure; the last case of delisting occurred through transfer on another stock exchange and occurred in 2022 with the passage of EXOR at Euronext Amsterdam.
The conclusions
According to Ambromobiliare, the Euronext Growth Milan market appears to be the most “dynamic”, with the net balance between IPOs and delistings being positive at 87 companies. It is also a market”lively“: the average time spent by companies on this market, between the IPO and the delisting, is equal to 4 years. The average premium paid by the offeror to the shareholders is equal to +30.1% compared to the market price prior to the announcement date of the operation, higher than that recognized on other price lists. The average annual performance is equal to +21.9%, higher than that recognized on other markets.
“In the majority of the takeover bids analyzed (19 out of 21 cases) the offer was promoted by external operators, of which 11 from a private equity operator – the analysts write – Therefore, in these cases, the company’s stock market listing constitutes a “showcase” to attract external investors”.