By Francesca Landini and Stephen Jewkes
MILAN (Reuters) -The Benetton family, which controls Italy's Atlantia, has told Global Infrastructure Partners (GIP) and Brookfield it is not interested in the funds' takeover approach for the Italian road and airport operator.
In a statement issued on Thursday by Edizione, the family's holding company, the Benettons said the investment in Atlantia is strategic and they want to preserve the group's Italian roots and its integrity.
They also confirmed discussions are under way with Blackstone Group (NYSE:BX), as a partner, for their own deal that would strengthen their grip on Atlantia but added that no agreement had yet been reached.
GIP and Brookfield earlier confirmed they had pitched a possible takeover of Atlantia, which operates airports in Rome and southern France and motorways in Europe and Latin America.
Shares in Atlantia, which has a market capitalisation of more than 16 billion euros ($17.5 billion), surged as much as 12% on the prospect of a bidding war also involving Florentino Perez, president of Real Madrid soccer club.
They ended up 6.9% at 20.3 euros.
The two funds, which specialise in infrastructure investments, confirmed they met Edizione on March 3 and 23 and presented the proposal to it on March 30. Edizione owns 33% of Atlantia.
The funds have an agreement with Perez's ACS for the Spanish construction company to acquire a majority stake in Atlantia's toll road concessions if any offer was completed.
The idea is to create two companies to extract more value, a source close to the funds said, adding Atlantia would be delisted.
GIP and Brookfield are working with Rothschild and another bank while Edizione and Blackstone have enlisted the help of Mediobanca (OTC:MDIBY), Goldman Sachs (NYSE:GS), JP Morgan and Bank of America (NYSE:BAC), two separate sources said.
GOLDEN POWERS
GIP and Brookfield had cautioned that they might not make a bid for a company, with an enterprise value of more than 45 billion euros once net debt is factored in.
Politics also risk complicating the situation, with the Italian government having veto "golden powers" over ownership of the country's airports.
"The theoretical deal would be markedly complex due to valuation, political and financing considerations," Kepler Cheuvreux said in a note, referring to any deal by ACS and its partners.
Alessandro Benetton was appointed chairman of Edizione this year, tightening the family's grip on its investments. Edizione said at the time it deemed its investment in Atlantia to be strategic.
Perez and the Benettons are already linked through their joint ownership of Spanish highway operator Abertis.
Through ACS, Perez previously pursued a bid for Atlantia's Italian motorway unit Autostrade per l'Italia but did not manage to secure the backing of the Italian government.
Atlantia eventually sold the unit, focus of a dispute with the government after the deadly collapse of a bridge in 2018, to Italian state lender CDP and allies. It is set to pocket 8 billion euros from the deal this year.
($1=0.9163 euros)