Introduction
MILAN, April 2 (Reuters) - Credit Agricole has received approval to increase its stake in Banco BPM, complicating UniCredit's plans for a tender offer. UniCredit announced it will launch a €14 billion bid for Banco BPM on April 28.
Context
UniCredit's takeover bid is part of a wave of hostile offers reshaping Italy's banking sector, which has recently strengthened its capital reserves thanks to record profits driven by high interest rates and a cleanup of bad loans.
- Italy's second-largest bank stated that its tender offer, now cleared by market watchdog Consob, will continue until June 23.
- In contrast, Credit Agricole confirmed that the European Central Bank had approved its 19.8% stake in Banco BPM.
- The French bank has significant commercial interests in Italy, its largest foreign market, where long-term agreements generate fees.
Developments
Upon announcing the bid for Banco BPM, UniCredit CEO Andrea Orcel invited BPM's investors to discussions, suggesting that mutually agreeable solutions could be found. However, buyout regulations mandate equal treatment for all shareholders.
- Orcel holds negotiating power in a distribution agreement between UniCredit and Credit Agricole's fund manager Amundi, which is set to expire in 2027.
- He has been enhancing in-house fund management skills and has not dismissed the possibility of terminating the deal established when Amundi acquired UniCredit's fund business for €3.6 billion.
- Additionally, Credit Agricole maintains consumer finance and non-life insurance partnerships with Banco BPM that it wishes to continue.
- Credit Agricole initially acquired a 9.2% stake in Banco BPM following an earlier unsuccessful takeover attempt by UniCredit.
- The French bank has managed to maintain a favorable relationship with Italy's government through a non-aggressive expansion strategy and its involvement in rescuing failing lenders in 2017.
- Orcel's pursuit of BPM in November disrupted the Italian Treasury's efforts to promote a merger between Banco BPM and the state-backed Monte dei Paschi di Siena.
To bolster BPM's defenses against UniCredit, Credit Agricole secured derivatives in December to increase its holding and continued to buy more derivatives in the first quarter, confirming that it has no intention of acquiring the entire company.
UniCredit has asserted that its bid for BPM is "autonomous and independent" from its plans to merge with Germany's Commerzbank.
- Orcel currently owns 28% of Commerzbank and is in discussions about a possible acquisition with Berlin's new government, although he has postponed any deal until late 2026 or even 2027.
- Furthermore, he holds a 4.2% stake in Italian insurer Generali and may influence the April 24 shareholder vote to elect a new board before finalizing any agreement.
With declining interest rates, asset management has become essential for banking revenues. Prior to UniCredit's offer, Banco BPM had made a bid for the Italian asset manager Anima Holding.
To ensure that deal proceeds, the price needs to be elevated, and benefits from the ECB might assist this.
Conclusion
These decisions allow UniCredit to reconsider its bid for BPM. The bank has until 0529 GMT on June 30 to decide whether to increase its offer for BPM or waive the conditions associated with Anima.
Following the loss of capital benefits, which has impacted BPM's share price, the discount of UniCredit's offer relative to Banco BPM's market value has decreased to €500 million.