Italian bank Banco BPM has rejected a takeover bid from domestic competitor UniCredit, stating that the offer does not adequately reflect the bank’s profitability. UniCredit’s €10 billion ($10.52 billion) bid was criticized by Banco BPM’s board of directors for being delivered on “unusual” terms and without prior agreement. The board further claimed that the proposed merger could potentially harm the bank’s legal autonomy due to its hasty timeline.
The bid from UniCredit came only two months after the bank had expressed interest in a potential takeover of Germany’s Commerzbank, a move that faced severe opposition from the German government. Banco BPM’s board indicated that UniCredit’s offer introduces uncertainty for its stakeholders regarding the bank’s expansion plans in Germany.
UniCredit’s CEO, Andrea Orcel, however, assured that a transaction with Banco BPM would take precedence over any potential venture with Commerzbank.
Banco BPM shares experienced a slight dip, while UniCredit’s shares remained stable on Tuesday.
UniCredit’s proposal involved offering 6.657 euros per share of Banco BPM, a slight premium over Friday’s closing price. Orcel referred to Banco BPM as a “historical target,” reigniting media reports that UniCredit had previously sought a merger with Banco BPM in 2022.
However, UniCredit’s plans for consolidation have yet to materialize as it waits for the European Central Bank’s approval to increase its current 21% holding in Commerzbank to 29.9%. The Italian government has so far been lukewarm towards UniCredit’s domestic plans.
Earlier this month, the stage was set for Italian mergers and acquisitions when Banco BPM acquired a 5% stake in Monte dei Paschi, the world’s oldest bank and a previous takeover target of UniCredit. At the time, Banco BPM stated it had no plans to request approval to increase its stake in Monte dei Paschi beyond 10%.
In summary, the unexpected takeover offer from UniCredit has been rejected by Banco BPM, citing that it does not reflect its profitability and potential for further value creation. The move has added a new twist to the banking landscape in Italy and could lead to further developments in the future.
