UniCredit Files 10.5-Billion-Euro Bid for Rival Banco BPM
Milan, Nov 27 (Reuters) – UniCredit has filed its 10.5-billion-euro ($10.5 billion) all-share offer for rival Banco BPM with Italy’s market regulator,, according to CEO Andrea Orcel.
The filing makes the offer binding and sets a price floor, with UniCredit applying to relevant authorities for regulatory approval. Shares in Banco BPM closed at 7.846 euros on Friday, significantly above the 6.657 euros a share UniCredit is offering based on the bid’s exchange ratio, indicating investors are betting on an improvement of the proposal.
“We consider our initial offer to Banco BPM shareholders to be fair and appropriate,” Orcel said in a statement. “Any deal must create shareholder value and be superior to the return from any UniCredit share buyback. An M&A veteran, Orcel has said he wants any deal to return at least 15%.
The CEO, who built his fortune as a bank merger advisor, had hinted that UniCredit might consider topping up the offer with cash down the road. He also invited Banco BPM’s biggest shareholder, Credit Agricole, to discuss potential commercial partnerships.
Shares in UniCredit are expected to be valued at 175 newly issued shares for every 1,000 BPM shares, a premium of just 0.5% to BPM’s share price prior to the bid. Orcel emphasized that the terms represent a 15% premium to BPM’s share price before the bank’s bid for Anima Holding on November 6.
The CEO believes that BPM investors would fare better holding UniCredit shares, citing its “far greater resiliency and diversification going into a challenging year.” UniCredit’s offer values Banco BPM at approximately 6.657 euros a share, a premium of 15% to the price earlier this month.
