Italian Court Clears Path for Reappointment of Milan Stock Exchange CEO Fabrizio Testa
Italian Court Decision and Implications for Milan Stock Exchange Leadership
By Giuseppe Fonte and Elvira Pollina
Background of the Legal Dispute
ROME, May 4 (Reuters) - An Italian court rejected a request by state lender Cassa Depositi e Prestiti to block the reappointment of Fabrizio Testa as chief executive of the Milan Stock Exchange, two 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.
The governance clash is part CDP's broader attempt to gain greater influence within Euronext, a push that Reuters has previously reported aims to ensure the appointment of an Italian executive to lead the operator at a later stage.
Court’s Rationale and Immediate Impact
The court in Milan did not find that the conditions for an urgent intervention, as requested by CDP, had been met, according to one of the sources.
Consequences of the Ruling
Testa’s Prospective Reappointment
RULING LIKELY CLEARS WAY FOR TESTA'S REAPPOINTMENT
Following the ruling, a Borsa Italiana shareholders' meeting will likely give Testa a new three-year mandate this week, although CDP has filed a separate legal action in Amsterdam, where Euronext has its registered office.
CDP’s Position and Euronext’s Response
CDP wanted Euronext to consider alternative candidates to Testa and to conduct a proper search process.
Euronext had been expected to reappoint Testa on April 29, but it postponed the decision to May 5 pending the legal proceedings.
Euronext declined to comment, while CDP was not immediately available for comment.
Context: Euronext and Borsa Italiana
Leadership and Strategic Importance
In February, Euronext CEO Stephane Boujnah praised Testa, who has been at the helm of Borsa Italiana since 2021, for his "unprecedented results".
Euronext, which operates the Amsterdam, Brussels, Dublin, Lisbon, Milan, Oslo, Athens and Paris exchanges, completed its acquisition of Borsa Italiana in 2021 from the London Stock Exchange Group.
The 4.3-billion-euro ($5.03 billion) deal made Italy one of Euronext's biggest trading venues and a key revenue driver.
Key Stakeholders
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.
Broader Implications for Italian Markets
Concerns Over Italian Market Influence
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.
Labour Relations and Staff Response
Italian Stock Exchange staff went on a half-day strike last week, with trade unions protesting against deteriorating working conditions and strained relations with Euronext management.
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(Reporting by Giuseppe Fonte and Elvira Pollina; Editing by Giulia Segreti and Joe Bavier)
