Exclusive-Italy approves Prelios deal after ION discloses loan terms, sources say

By Giuseppe Fonte and Valentina Za

ROME (Reuters) -Italy has cleared, with conditions, ION’s acquisition of credit manager Prelios after the fintech group disclosed the details Rome had been requesting about the deal’s financing, two government sources said on Monday.

The disclosure request had led to a stalemate over the 1.3 billion euro ($1.4 billion) deal struck in August 2023, which needs clearance under “golden” powers Italy has to shield assets of strategic national relevance from unwanted foreign interest.

The government department in charge of such powers has found a compromise solution with ION’s lawyers to resolve the impasse, a person with knowledge of the matter told Reuters earlier on Monday.

Representatives for both ION and the office of Prime Minister Giorgia Meloni declined to comment.

After the government gave the Prelios acquisition a first green light in January, the transaction got stuck over Italy’s request for ION to inform it when Prelios shares legally became collateral for the financing banks are providing for the deal.

That typically happens at closing of such transactions.

The government’s request stemmed from its need to have clarity on who would become a shareholder in Prelios if the loan guarantees were ever tapped.

Of the price tag ION has agreed with Prelios’ owner, U.S. investment fund Davidson Kempner, some 630 million euros are being financed at closing through a bank loan.

The pool of banks includes lenders such as UniCredit and BNP Paribas.

Giving notice to the government about the shares being legally set up as collateral for the loan would normally trigger a new authorisation procedure, introducing an element of uncertainty that would stop banks from providing financing for the deal.

The sources said the parties had found a way to overcome the Catch-22 situation through the disclosure of the documents ION provided, allowing the deal to advance, though it is now expected to close after the initially indicated March 31 deadline.

ION will need to simply inform the government about the collateral being set up as well as any tapping of the guarantees.

The acquisition, ION’s latest investment in the home country of its founder Andrea Pignataro, also needs approval from the Bank of Italy, which supervises Prelios’ loan recovery and asset management operations.

Reuters reported in January Pignataro’s acquisitions in Italy’s financial service sector had prompted the central bank to study in detail the group’s complex ownership structure.

ION is a financial software and data group which supplies the IT infrastructure banks use for trading and processing of trades.

With a view to replicating ION’s business to serve small lenders, Pignataro bought IT banking services firm Cedacri and credit data group Cerved in Italy in 2021, investing some 6 billion euros in the country in recent years.

($1 = 0.9141 euros)

(Reporting by Giuseppe Fonte in Rome and Valentina Za in Milan; Editing by Jan Harvey and Tomasz Janowski)