CashNews.co
STORY: Italy’s UniCredit on Monday (November 25) launched a surprise $11 billion all-share offer for rival Banco BPM.
That’s while it pursues a contentious deal for Germany’s Commerzbank.
The proposal offers 0.5% premium for Banco BPM shareholders, valuing shares at 6.67 euros each.
It’s not the first time UniCredit has set its sights on its domestic peer with roots in Milan’s wealthy Lombardy region – an area where UniCredit’s presence is limited.
UniCredit’s CEO Andrea Orcel said with the acquisition of “one of our historical targets, we reinforce our position in Italy.”
Italy’s second-largest bank said its offer for Banco BPM is independent of its proposed investment in Commerzbank, which has sparked backlash.
UniCredit already has a near 21% stake in the German bank.
And there’s political opposition to a takeover by an Italian lender that would lead to job cuts and expose Commerzbank to Italian sovereign risk.
Two sources said the Banco BPM move took Commerzbank by surprise as management tried to figure out what it meant.
The offer for Banco BPM comes after the smaller lender bought 5% in bailed-out rival Monte dei Paschi – or MPS – this month.
It was a move seen as potentially paving the way for a combination of the two mid-sized lenders as the state pulls out of MPS entirely.
BPM did not immediately respond to a Reuters request for comment.
Commerzbank shares fell as much as 7% at market open.
While BPM shares rose 5%.