Banco BPM Rejects UniCredit’s Takeover Offer
Milan, Italy – Banco BPM, Italy’s third-largest bank, has officially turned down a takeover bid from rival UniCredit, asserting that the offered price does not adequately reflect the value and potential of the combined entity. Banco BPM’s management expressed concerns that the deal would result in adverse penalties for its shareholders.
The takeover proposal, amounting to €13 billion (approximately $14.8 billion), is set to commence on Monday and will be open until June 23. UniCredit holds the option to withdraw the offer until June 30. ## Concerns Over Offer Conditions
During a conference call following the decision, Banco BPM Chairman Massimo Tononi highlighted issues surrounding UniCredit’s bid, stating, “We find it really quite awkward that already three of the conditions UniCredit has included in their offer have not been fulfilled.” He expressed confusion over UniCredit’s intentions regarding these conditions, questioning whether they plan to waive them or withdraw the offer entirely.
Despite the ongoing negotiations, UniCredit has indicated it prefers to take its time, suggesting it may not make a definitive decision until the offer window closes.
Government Regulations and Market Reactions
The proposed acquisition faces complications due to stipulations set forth by the Italian government, which UniCredit has claimed could potentially hinder their ability to finalize the bid. According to Banco BPM, the terms of the takeover include an exchange offer of 0.175 new UniCredit shares for each Banco BPM share, reflecting a 9% discount based on current market prices.
Banco BPM’s board officially recommended rejecting the offer to its shareholders, reiterating that the proposal lacked any premium and would result in a diminished stake for Banco BPM investors in the merged entity. Currently, Banco BPM shareholders would only hold a 14% stake in the combined company; however, the bank estimates its contribution to profits by 2027 would warrant an 18% stake.
A Long-Standing Target
Banco BPM has remained a strategic target for UniCredit for several years, largely due to its geographical roots in Lombardy – a wealth-rich region where UniCredit has traditionally held a smaller market share. Following two prior unsuccessful takeover attempts, UniCredit had aimed to solidify its position in the market by pursuing Banco BPM following its discussions for a potential merger with Monte dei Paschi di Siena.
The rejection of this bid further complicates the landscape of Italian banking as ongoing consolidation discussions continue amidst an ever-evolving financial environment.
Conclusion
As discussions progress and regulatory landscapes shift, the future of both Banco BPM and UniCredit remains a point of considerable interest within the banking sector. Stakeholders will be keenly observing any developments in the weeks leading up to the offer deadline, particularly in light of the significant implications for both banks and their respective shareholders.
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