UniCredit offered to buy the second largest Italian bank Banco BPM for €10bn in late November last year. The acquisition was a counter offer of UniCredit after BPM bid to buy Anima for €1bn to boost its asset management fee income amid falling interest rates.
Italy’s largest bank, UniCredit, has said it will walk away from a takeover deal of Banco BPM SpA if the smaller rival persuades its shareholders to approve an increase in bid for Anima Holding SpA.
“The acts on which BPM’s shareholders are being asked to resolve could conflict with the objectives of the public exchange offer announced by UniCredit S.p.A. (“UniCredit”) on November 25 2024, and targeting BPM (the “Offer” or “UniCredit Offer”)”, UniCredit stated in a statement.
The takeover battle
UniCredit offered to buy the second largest Italian bank Banco BPM for €10 billion in late November last year. The acquisition was a counter offer of UniCredit after BPM bid to buy Anima for €1bn to boost its asset management fee income amid falling interest rates. Chief Executive Officer (CEO) of BPM, Giuseppe Castagna rejected that offer.
However, UniCredit’s offer made it hard for the bank to pursue its offer to Anima due to regulations. Under Italian rules, targeting banks cannot proceed with an acquisition offer without shareholder’s approval.
BPM has to hold a shareholders meeting to vote for its increased bid for Anima on 28 February. The offer is to increase the bid price from €6.2 per share to €7 per share. A takeover of Anima will raise BPM’s market valuation to above €13bn, which is well above UniCredit’s offer price. CEO Andrea Orcel said he would not overpay for the deal earlier this month.
BPM’s Castagna will need to get regulatory approval for a beneficial capital treatment of the deal – known as the Danish Compromise – to walk around the conditions. However, it also means that BPM need to get a node from the European Central Bank, which will be a lengthy process.
In Monday’s statement, UniCredit also stated: “…in case the Offer were 100% successful and the Danish Compromise not granted, BPM CET1 ratio would decline by approximately 268bps, that would be added to the financial burden deriving from an increased consideration”.
Escalating tensions
Castagna pushed back on such a statement in the interview and said the scenarios used by UniCredit are “very dangerous”. He said: “The allegations that we are not going to get the Danish Compromise is completely fake news”, adding that Orcel is “trying to influence the shareholder vote in the assembly”.
He added: “The guy is trying to play a game. He’s very good at that. They want to depress our stock in favour of his stock, but we will respond also legally to this kind of allegation.”
If Banco BPM secures shareholder approval to increase the price, two leading Anima investors, Poste Italiane, and private equity fund FSI, have already said they would sell their stakes to BPM, Reuters reported.
At the end of UniCredit’s statement, it reiterated that the bank “has not yet taken any decision regarding the conditions of the Offer.
“Therefore, notice of the above is given to the public to ensure that BPM shareholders can make their own decisions in relation to the Resolution in full awareness of the risks and uncertainties underlying the proposals that have been made to them and of the possible consequences of their decisions which may affect the Offer.”
