Banking Power Play: UniCredit’s Bid for Banco BPM Sparks Controversy
A Battle for Control
In a surprise move, UniCredit has launched a €10 billion all-share bid for Banco BPM, Italy’s third-largest bank. But Banco BPM is fighting back, accusing UniCredit of trying to sabotage its own bid for fund manager Anima.
A Question of Fairness
Banco BPM’s board has asked market watchdog Consob to intervene, claiming that UniCredit’s bid is unfairly restricting its ability to raise the price of its offer for Anima. Under Italian law, a takeover target’s managers cannot take any action that might thwart the bid without prior shareholder approval. This puts Banco BPM in a difficult position, as it cannot increase its offer for Anima without UniCredit’s permission.
A Dispute Over Value
At the heart of the controversy is the value of Banco BPM. UniCredit claims to have offered a 15% premium to the bank’s share price, but Banco BPM disputes this figure, arguing that the premium is actually around 4%. The bank’s CEO, Giuseppe Castagna, has accused UniCredit of lacking transparency and trying to mislead the market.
A Clash of Strategies
Castagna has also highlighted the differences between Banco BPM’s strong roots in northern Italy and UniCredit’s more diversified but also more uncertain presence in Germany and Russia. UniCredit’s CEO, Andrea Orcel, has countered that his bank’s shareholders would be better off holding UniCredit stock, citing its greater resilience and diversification.
Market Reaction
Shares in Banco BPM were flat at €7.96 each, compared to the €6.66 price offered by UniCredit. Based on Monday’s closing price, Banco BPM claims that UniCredit’s bid is now priced at a 14% discount to the market price.
A War of Words
The battle for control of Banco BPM is heating up, with both sides trading barbs and accusations. As the situation unfolds, one thing is clear: the stakes are high, and the outcome will have significant implications for Italy’s banking sector.
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