(Bloomberg) -- ION Group, the financial services firm run by Andrea Pignataro, is pushing back against scrutiny by Italy’s government of its planned €1.35 billion ($1.46 billion) takeover of asset manager Prelios SpA, saying the review puts the deal at risk, according to people familiar with the matter.

The government is seeking reassurance about what Prelios’s debt levels would be after the acquisition, and wants ION to submit a new request for approval once it has completed financing, Bloomberg reported Jan. 16. But banks that signed up to provide funding can only proceed once authorities clear the transaction, the people said, asking not be identified discussing an ongoing process. That’s effectively holding up the deal until the impasse is resolved.

ION has told the government that the demands are tougher than those applied in similar deals in the past, including its acquisitions of Italian firms Cerved and Cedacri, and could make it challenging to complete the transaction, according to the people.

“ION and Prelios are working collaboratively with the government and the process is progressing smoothly as per previous transactions completed with Cedacri and Cerved,” ION Group said in a statement, referring to the two other Italian companies it bought. 

ION also said that Bloomberg’s reporting was inaccurate, but did not provide any specifics. Bloomberg LP, the parent company of Bloomberg News, competes with ION in providing financial software and data.

The government is looking into ION’s debt structure as Pignataro’s company has built a crucial role in the country’s financial industry, a sector Italy deems strategic, the people said. In addition to about $12 billion of bonds and leveraged loans, ION has borrowed about $3 billion from private lenders including New York-based HPS Investment Partners, Bloomberg News reported last week. One of its divisions delayed the completion of a new debt deal to hold calls with potential investors this week.

Government officials and the company are working to find a solution, and the government plans to give the green light if ION agrees to its requests, the people said. A spokesperson for the Italian government declined to comment.

Pignataro, a 53-year-old former Salomon Brothers trader, founded ION in London in the late 1990s. It offers services to financial institutions, central banks, governments and corporates, and its businesses include Dealogic, Fidessa Trading and Acuris, the owner of financial news platform Mergermarket.

The acquisition of Milan-based Prelios would give ION control of a firm that manages more than €40 billion of assets. Prelios also provides real estate services such as valuations and property management.

Prime Minister Giorgia Meloni’s administration last month decided against using its special powers to block the takeover, but sought the additional review as ION plans to use Prelios shares as a guarantee to lenders and merge it with the acquiring holding company.

A similar deal structure was used by ION in its previous Italian acquisitions, which were approved by the government without any further scrutiny, the people said. Other companies have also used such structures for acquisitions.

The government is concerned that if ION were unable to make payments on Prelios’ debt, there would be repercussions for the broader Italian financial system, according to the people. A takeover of Prelios, along with its existing ownership of Cerved and Cedacri, would increase ION’s market share in a number of key banking areas.

Some of ION’s debt is held at holding companies within Pignataro’s empire. It has in the past used dividends from its operating companies to cover the cost of that borrowing, Bloomberg has reported.

ION has also repeatedly sold debt to fund dividends. On Monday, ION Markets, a unit of the group, extended the deadline for a new $1.825 billion leveraged loan sale by three days, giving investors more time to decide whether to participate in the deal.

READ MORE: Fintech Giant ION Grew With Billions in Secretive HPS Debt

--With assistance from Giulia Morpurgo and Luca Casiraghi.

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