UniCredit launches a voluntary public exchange offer on all of the common shares of BPM desk for 10.1 billion euros, entirely in shares. With this operation the group led by Orcel strengthens its network of branches and above all regains possession of the factories for managed savings considering that the institute led by Giuseppe Castagna has just launched the takeover bid for Anima.
The initiative is galvanizing Piazza Affari which initially gains about half a point. Unicredit loses around 2.5% while the Bank is immobile. The exchange ratio was set at 0.175 newly issued UniCredit shares for each existing Banco BPM share, which entails an implicit offer price of 6.657 per share, and a premium of approximately 0.5% compared to the official prices of November 22nd. This represents a premium of around 15% compared to the price on November 6 – around 20% if adjusted for the interim dividend already distributed in November by both banks -, before the announcement of Anima’s takeover offer.
“The offer is autonomous and independent of the investment made by UniCredit in the share capital of Commerzbank”, specifies the company in a note which adds that it has taken note of the voluntary public purchase offer for all the ordinary shares of Anima Holding recently announced from Banco BPM Vita. The project aims in fact “to strengthen the competitive position of UniCredit in Italy, one of the group’s main markets, creating an even stronger second bank in an attractive market, capable of generating significant long-term value for all stakeholders and for Italy. The complementary nature of the businesses both in terms of geographies and customer segments, combined with the demonstrated ability to execute UniCreditcause the board of directors to believe that the transaction represents a manageable execution risk.”
The profitability of the combined group will benefit from pre-tax cost synergies estimated at approximately 900 million per year when fully operational – equal to approximately 14% of the combined group’s Italian cost base in 2023. This is in addition to the revenue synergies at before taxes estimated at approximately 300 million. As part of the operation, “the group currently expects integration charges of approximately 2.0 billion before taxes to be incurred during the first year, and additional credit adjustments of approximately 800 million before taxes, which will allow a improvement of the coverage ratio of impaired loans and performing exposures of Banco BPM”. If the operation were to be successful there would be a revolution within the Italian banking system considering that BPM desktogether with Soulowns 9% of Mps. It is thus placed in second place after the Treasury which owns 15% and ahead of the Caltagirone-Delfin couple (Del Vecchio family) who own 7%. The great risk of Italian finance has begun.
