Italian court rejects CDP bid to block reappointment of Milan bourse CEO
CDP’s Legal Challenge and Milan Bourse Leadership
By Giuseppe Fonte and Elvira Pollina
Background of the Dispute
ROME, May 4 (Reuters) - An Italian court rejected a request by state lender Cassa Depositi e Prestiti (CDP) to block the reappointment of Fabrizio Testa as chief executive of the Milan Stock Exchange, three sources familiar with the matter said on Monday.
Treasury-controlled CDP holds an 8.1% stake in pan-European exchange operator Euronext, which in turn owns the Milan Stock Exchange, also known as Borsa Italiana.
CDP’s Broader Strategy
The governance clash is part of CDP's broader attempt to gain greater influence within Euronext, a push that aims to ensure the appointment of an Italian executive to lead the Amsterdam-registered group at a later stage.
Court’s Decision
The court in Milan did not find that the conditions for an urgent intervention, as requested by CDP, had been met, the sources said.
Implications of the Ruling
Testa’s Reappointment
RULING CLEARS WAY FOR TESTA'S REAPPOINTMENT
Following the ruling, a Borsa Italiana shareholders' meeting scheduled for May 5 is expected to give Testa a new three-year mandate, although CDP is pressing ahead with a separate legal proceeding in Amsterdam.
Ongoing Legal Actions
CDP wants Euronext to acknowledge its right to trigger a proper search process aimed at assessing alternative candidates to Testa and board members.
In Amsterdam, CDP will seek a court order forcing Euronext to remove all Borsa Italiana directors to be appointed this week, one of the sources added.
The legal case is expected to take around 12 months to conclude, the source said.
Timeline of Events
Euronext had planned to reappoint Testa on April 29, but it postponed the decision to May 5 pending the legal proceeding in Milan.
Stakeholder Reactions and Broader Context
Euronext and Stakeholder Positions
The stock exchange operator's CEO Stephane Boujnah in February praised Testa, who has been at the helm of Borsa Italiana since 2021, for his "unprecedented results".
Italy's largest bank, Intesa Sanpaolo, owns a 1.55% stake in Euronext, while France's Caisse des Depots holds an 8.1% stake, equal to CDP's.
Concerns and Labor Unrest
The legal battle comes amid concerns in Italian government circles that Euronext could scale back its Italian operations and favour listings in France or other markets.
Italian Milan bourse staff went on a half-day strike last week, with trade unions protesting against deteriorating working conditions and strained relations with Euronext management.
Additional Information
($1 = 0.8543 euros)
(Reporting by Giuseppe Fonte and Elvira Pollina; Editing by Giulia Segreti and Joe Bavier)
