Italgas crashes more than 2 percent on the stock market, penalized by the announcement yesterday of exclusive negotiations to take over control of rival 2i Rete Gas, with the market also fearing recourse to a capital increase to finance the deal worth an estimated 4-5 billion euros.

Around 11 a.m., the stock lost 1.76 percent to 5.29 euros, recovering from session lows touched at 5.2 euros. Volumes of 3.9 million shares against a 30-day average of 2.74 million.

Yesterday, the company announced that it had been granted an exclusive period to conduct 'due diligence' in preparation for a binding offer to purchase 100 percent of 2i Rete Gas, which would be financed through a bridge loan guaranteed by JP Morgan, the refinancing of which may be through a combination of equity, debt or 'equity like' instruments, with the aim of maintaining Italgas' current rating profile. He then postponed the presentation of the 2024-30 strategic plan scheduled for June 12.

According to an unnamed analyst, weighing on the stock's performance are fears of a possible use of a capital increase to finance the acquisition of the rival gas distribution company, controlled by the F2i fund, since it could not be financed entirely with debt. The analyst adds that there are also significant antitrust risks and there is no doubt that some assets will have to be divested to bring the deal to fruition.

In an early April report, broker Equita wrote that "the deal for Italgas makes sense if the price paid sees a reduced premium on Rab. We believe that the 4/5 billion valuation is an Enterprise value and does not imply significant premiums. For Italgas, there would be a significant Eps accreation impact even assuming significant remedies from Antitrust."

(Giancarlo Navach, editing Stefano Bernabei)