By Andrea Mandala and Valentina Za
MILAN (Reuters) -BPER Banca’s CEO on Friday said its 4.3 billion euro ($4.5 billion) all-share takeover bid for smaller peer Banca Popolare di Sondrio was a defensive move prompted by a raft of merger proposals across Italy’s banking industry.
Mid-sized Italian banks like BPER have long been seen as candidates for consolidation. Previously, BPER had explored a tie-up with Banco BPM but they never reached an accord. Banco BPM has now become a target for larger bank UniCredit.
Popolare di Sondrio’s board will meet on Feb. 11 to consider the bid, which it said was neither requested nor agreed.
BPER Chairman Fabio Cerchiai said the offer was not hostile, while CEO Gianni Franco Papa said BPER plans to keep Pop Sondrio’s brand and cut jobs only through voluntary early retirement.
“The current consolidation phase hastened this transaction: it became imperative for us to defend our competitive position also in terms of size,” Papa said.
Shares in BPER, Italy’s fourth largest bank, plunged 6%, with analysts saying Pop Sondrio, whose shares rose over 6%, was worth more in terms of valuation multiples.
“Delivering meaningful earnings per share accretion on this tie up is not an easy task,” Jefferies said.
“However, there are strategic merits to the deal, with BPER acquiring exposure to attractive regions and increasing market share in an environment of rapid sector consolidation.”
The combined entity will have a 14% market share in Lombardy, Italy’s wealthiest region, double BPER’s current share.
A tie-up would bring together two banks whose main shareholder is Unipol, Italy’s second-largest insurer which has a near 20% equity stake in each lender.
Papa said Unipol had been consulted, and would now assess the financials of the deal.
UNIPOL
Unipol Chief Executive Carlo Cimbri has bet on commercial accords with banks to sell the insurer’s products, buying stakes to secure the partnerships, and backing the expansion of BPER’s branch footprint.
Given the shareholding structure, the bid would give BPER control with as little as 35% of Pop Sondrio plus one share.
BPER, based in the town of Modena, famous for its automakers, including Ferrari, cured meat products and balsamic vinegar, jumped in size in 2020 by buying 600 branches in the Intesa Sanpaolo-UBI merger. It then swallowed up Genoa-based rival Carige.
BPER is offering 29 new shares for every 20 Pop Sondrio shares tendered, a 7.8% premium based on Thursday’s closing prices, Reuters’ calculations showed.
