© Reuters. The office of the President of the Italian Council of Ministers at Palazzo Chigi, Rome, Italy, January 8, 2021. REUTERS/Guglielmo Mangiapane
MILAN (Reuters) – The government detailed the conditions for authorizing the acquisition of real estate and credit management company Prelios by Ion Group for 1.3 billion euros in an email sent to the fintech group at the end of the last week.
A source familiar with the matter said so.
Reuters anticipated news last week of the government’s OK for Ion, which provides IT solutions for financial services and operates globally through an intricate system of companies controlled by Luxembourg-based holding companies.
Ion has gained growing importance in Italy, the home country of founder Andrea Pignataro, after investing around 6 billion euros in the Italian financial sector in recent years.
Ion’s plan to purchase Prelios, which is based in Milan, from the US fund Davidson Kempner, requires the government’s green light on the basis of the so-called ‘golden power’, a rule that allows Rome to block foreign interests in activities deemed to be of national strategic importance.
After a preliminary green light, the approval process was blocked. In fact, the banks could not sign off on the €630 million loan for the deal if the loan agreements had to be subject to government scrutiny, as this created uncertainty about the outcome of the transaction they were financing.
The government needs transparency on how Prelios’ ownership might change and who the new owners would be if the loan, which is secured by company shares, is not repaid.
According to the solution found, the Cabinet gave conditional approval after examining the draft contracts for the loans and for the merger of X3G Mergeco, Ion’s acquisition vehicle, into Prelios, the source said.
Ion must send the contracts once signed and, if they reflect the drafts, the approval remains valid, the source added.
Separately, a government document sent to Parliament and seen by Reuters showed that another Ion vehicle, Lavaredo UK Holding, will be merged into Prelios along with X3G Mergeco.
As the acquisition vehicle employed in the leveraged buyout transaction, X3G will formally assume the collateralized debt used for the Prelios transaction.
Ion has also undertaken to preserve the organizational and security measures currently adopted by Prelios to protect sensitive data and to update them based on the evolution of technology.
The acquisition of Prelios must now be approved by the Bank of Italy, which has been examining Ion’s complex corporate structure for some time.
(Translated by Camilla Borri, editing by Gianluca Semeraro)