UniCredit queries Italy’s conditions for Banco BPM bid

Milan — UniCredit said on Tuesday its ability to make “sound” decisions could be jeopardised by the Italian government’s conditions for approving the bank’s bid for Banco BPM, and it needed answers to its concerns before any further moves.

Growing uncertainty over the fate of UniCredit’s €14bn all-share bid drove Banco BPM’s shares down 2.5% by 8.46am GMT (10.46am).

In contrast, shares in Commerzbank, another potential takeover target for UniCredit after CEO Andrea Orcel built a 28% stake, rose 2.7%, bucking a dip in Germany’s benchmark DAX share index. A takeover, however, also faces hurdles as it is opposed by Commerzbank management, unions and the German government.

Rome on Friday cleared Orcel’s plans to acquire Banco BPM provided UniCredit, Italy’s second-biggest bank, meets certain conditions. The bid, which BPM has rejected as hostile, is due to start on April 28.

It lasts until end-June and UniCredit has said it reserved the right to decide at the very end whether to see it through.

In setting its conditions, the government has given UniCredit nine months to cease its activities in Russia, a person with knowledge of the conditions previously said.

It has also asked the bank not to reduce for five years the banks’ loan-to-deposit ratio, which is currently higher for Banco BPM, compared to UniCredit, the person said.

UniCredit must also avoid reducing investments in Italian securities at Anima Holding, a fund manager recently acquired by Banco BPM, and support Anima’s growth.

UniCredit’s swoop on BPM, which derailed Rome’s plans to combine BPM with state-backed Monte dei Paschi di Siena, is among other hostile takeover bids rocking Italian banking.

Rome has cleared unconditionally Monte dei Paschi’s offer for Mediobanca, and BPER’s bid for Popolare di Sondrio.

“The prescriptions imposed to UniCredit, could harm its full freedom and ability to take sound and prudent decisions in the future, and even lead to unintended results” such as fines, UniCredit said on Tuesday.

The government’s decree, which UniCredit received on Friday, included the possibility for the bank “to immediately report to the [relevant] authority if it is not possible to implement — in whole or in part — the prescriptions”, Italy’s second-biggest bank said.

“UniCredit has promptly responded to the authorities with its views on the decree and awaits feedback. Until then, UniCredit is not in a position to take any conclusive decision on the way forward regarding its offer on Banco BPM,” it added. Reuters