BPER Banca approves cash call to fund purchase of assets in Intesa/UBI deal

BPER Banca approves cash call to fund purchase of assets in Intesa/UBI deal

MILAN, April 22 – Shareholders in BPER Banca on Wednesday gave the green light to a cash call needed to fund a deal which Intesa Sanpaolo hopes will address antitrust issues in its takeover bid for smaller rival UBI.

If its unsolicited bid to create the euro zone’s seventh-largest banking group succeeds, Intesa will sell 400-500 branches of the combined entity to BPER, along with 20 billion euros in loans.

As it pressed ahead with its offer for UBI amid one of the world’s deadliest coronavirus outbreaks, Intesa last month said it was ready to accept a lower price from BPER for the assets.

Under the revised terms of the deal, which take into account banks’ shrinking market value due to the fallout from the pandemic, the size of BPER’s cash call will be much smaller than the initial estimate of 800 million euros ($869 million), CEO Alessandro Vandelli told shareholders.

Vandelli said the bank reasonably expected to launch the share issue after the summer.

Intesa is offering 1.7 new shares for each UBI share tendered by investors in Italy’s fifth-largest bank.

The only cash outlay in the complex takeover deal – the biggest banking merger in Europe in a decade – falls on BPER’s shareholders, led by insurer UnipolSAI with a 20% stake.

Italian banks, which were just emerging from a long restructuring process following three recessions in a decade when the virus hit, face new losses due to an expected surge in bankruptcies.

Vandelli said BPER was evaluating possible loan writedowns linked to the COVID-19 emergency in the first quarter although it was hard to gauge the impact yet.

“But we can’t pretend nothing has happened,” he told shareholders.

The spread of the coronavirus emerged in Italy in late February prompting the government to impose progressively stricter containment measures which have stifled economic activity.

Italy’s top bank UniCredit on Wednesday became the first major euro zone lender to say it would write down the value of its loans due to the pandemic, announcing 900 million euros in additional loan loss provisions for the first quarter.


($1 = 0.9208 euros)

(Reporting by Andrea Mandala, editing by Valentina Za, Kirsten Donovan)

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