Italy's CDP against sale of majority of Nexi bank services business, sources say

By Giuseppe Fonte and Elvira Pollina

ROME (Reuters) -Italy's Cassa Depositi e Prestiti (CDP) opposes payments group Nexi selling a majority stake in its digital banking solutions business to U.S. private equity fund TPG, two sources close to the matter told Reuters on Monday.

Nexi, in which CDP is the second largest investor with a 19.14% stake, last week received a TPG bid for several assets within its division that provides digital services to banks.

Payments firms such as Nexi face growing pressure from fintech rivals and instant payment platforms which are eroding their market share and compressing margins.

Nexi shares are trading near record lows at just above 4 euros ($4.66), giving it a market capitalisation of almost 5 billion euros. Its value peaked at more than 20 billion euros in July 2021 due to a pandemic-driven surge in digital payments.

CDP is open to cooperating with investors interested in supporting Nexi in developing its assets, but only if they take minority stakes, said the sources, who asked not to be named due to the sensitivity of the situation.

CDP, TPG and Nexi all declined to comment.

Governments across Europe have long identified digital payments as a strategic sector. Last week, French state investment bank Bpifrance played a key role in coordinating a cash injection to help stabilise Nexi rival Worldline.

And to promote Europe's digital sovereignty and reduce its reliance on U.S. players such as Visa, the European Central Bank is working on a digital version of Europe's single currency.

Nexi said TPG's bid was subject to conditions, without disclosing the value of the offer, although a third person with knowledge of the matter said the U.S. firm had offered about 1 billion euros for the assets.

CDP and leading officials within the Italian government are against Nexi fully divesting the banking solution business, given its strategic importance, the sources added.

The division includes Italy's national interbank network, an infrastructure spanning more than 200,000 km and connected to the Bank of Italy for settling banking transactions.

It also provides technology solutions for open banking, corporate banking services and interbank clearing systems. Last year, it generated core earnings of 155 million euros.

Nexi had been in talks to sell the business to Italian infrastructure fund F2i for 700 million-800 million euros in 2023, but parties were unable to reach a deal, sources have previously said.

($1 = 0.8575 euros)

(Reporting by Giuseppe Fonte in Rome and Elvira Pollina in Milan; Editing by Alexander Smith)