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MILAN (Reuters) – UniCredit submitted a takeover offer for rival Banco BPM to Italy's market regulator on Friday, with Chief Executive Officer Andrea Orcel saying the price was right. .
The filing will be binding and set a floor price for UniCredit's proposed 10 billion euro ($10.5 billion) all-stock takeover announced on Nov. 25. UniCredit has also applied for regulatory approval from the relevant authorities.
The closing price of Banco BPM shares on Friday was 7.846 euros, significantly higher than the 6.657 euros per share offered by UniCredit based on the exchange ratio of the bid, indicating that investors are betting on an improvement in the offer. It shows.
“We believe the initial offer to Banco BPM shareholders is fair and appropriate,” Orcel said in a statement.
He said any deal must create shareholder value and exceed UniCredit's return on share buybacks. Orcel, an M&A veteran, said he wants to get at least a 15% return on any deal.
In announcing its bid for BPM, Orcel indicated that UniCredit may consider supplementing with cash in the future.
“We remain committed to a disciplined approach to all M&A, ensuring that any transaction demonstrates strategic fit and meets or exceeds our core financial metrics. There is a need.”
BPM has long been a target of UniCredit, but Mr. Orcel, who made his fortune as a bank merger advisor, has resisted an acquisition of BPM due to the M&A premium built into BPM's stock price, people familiar with the matter said. told Reuters earlier.
Accelerated domestic integration has put strain on his hands.
Orcel said BPM investors would be better off holding UniCredit shares because they have “much more resilience and diversification heading into a difficult year, and the total distribution yield is twice as high.” Ta.
UniCredit is offering 175 newly issued shares for every 1,000 BPM shares, representing a premium of just 0.5% over the pre-bid BPM stock price.
According to UniCredit, the terms were a 15% premium to BPM's share price before BPM's bid for fund manager Anima Holding on November 6, and the move is expected to increase the share prices of Anima and BPM. It is said that it was caused.
“Given the robustness of our approach, the premium offered and the fact that the situation remains unchanged from the time of our original offer, we are moving forward on those terms,” Orcel said.
UniCredit has also invited Credit Agricole (CA), BPM's largest shareholder, to attend talks that are widely expected to focus on commercial partnerships.
CA is partnered with both BPM and UniCredit. In order to strengthen its negotiating position, CA applied to the ECB to increase its holdings in BPM to 19.99% and used derivatives to increase its holdings in BPM from just under 10% to 15%.
