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MILAN, April 28 (Reuters) – Financial software provider ION Group is struggling to agree with banks terms for a financing it needs to buy the Italian business of U.S. investment fund Davidson Kempner (DK) Capital Management, two sources close to the matter said.
ION Group, founded by Italian businessman Andrea Pignataro, has been in talks for months with DK over the acquisition of Prelios, a bad loan management group which DK took private in 2018.
Sources had told Reuters DK had put a 1.4 billion euro ($1.6 billion) price tag on Prelios which ION would pay in stages through an earn out mechanism.
Talks however have stalled as ION has failed to agree with lenders the terms of the financing, the two sources said.
ION is looking to raise some 780 million euros in debt and has been holding several bilateral negotiations with lenders, a third source separately said, indicating BNP Paribas (BNPP.PA), Deutsche Bank (DBKGn.DE), JPMorgan (JPM.N) and UniCredit (CRDI.MI) among the lenders involved.
The banks either declined to comment or were not immediately available to comment.
Some of the banks are ready to provide the cash needed only as part of a bridge to bond structure, while ION would like to secure long-term financing, leading to a stalemate in talks with DK over the deal which are currently at a dead end, the sources said.
Under a bridge to bond structure, the buyer gets a funding package which is meant to be refinanced in the future through the sale of mid- to long-term high yield bonds.
ION has completed a string of acquisitions in Pignataro’s home country in recent years, including buying banking software group Cedacri, credit data and management group Cerved and investing in digital lender illimity (ILTY.MI).
($1 = 0.9061 euros)
Reporting by Valentina Za in Milan; Pablo Mayo Cerquiero and Andres Gonzalez in London;
Editing by Keith Weir
Our Standards: The Thomson Reuters Trust Principles.
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