Banco BPM expressed concerns about the $10.5 billion takeover offer from UniCredit rival, stating that the proposed offer does not show the actual profitability and growth capacity of the Italian lender. In a statement issued on Tuesday, Banco BPM board criticized the “unusual” terms of the all-stock offer, which was made without prior discussion. The board also expressed apprehension about the proposed swift timeline of the merger which may result in loss of legal autonomy of the bank.
Italy’s second-largest bank, UniCredit, made a Monday offer for Banco BPM by offering to pay €6.657 per share for it. The amount offered is marginally above the closing price of €6.644 recorded on Friday. Nevertheless, Banco BPM believes that the bid does not respect the profitability the bank enjoys in its present form or will in the future. Furthermore, the Banco BPM board warned that the potential merger could show a decline in the bank’s influence, mainly regarding its expansion plans in Italy and Europe.
This would come at a time when UniCredit is also weighing an option of buying Commerzbank, Germany’s second-biggest bank, in a deal that has attracted the wrath of the German government. Banco BPM board members stated that the simultaneous focus by UniCredit on both Commerzbank deal and the Banco BPM bid creates uncertainty, mainly over geographical positioning. The bank reiterated it would focus on Italy’s more dynamic regions, rather than spreading its resources thin in a quixotic expansion outside of those markets.
UniCredit’s Chief Executive Officer, Andrea Orcel, has announced that a merger with Banco BPM would take precedence over any plans with Commerzbank. Referring to the earlier failed attempt in 2022, Orcel described Banco BPM as an “historical target” for UniCredit, with the key aim being more robust banks in Europe for regional competitiveness on the world markets.
Although the deal has raised several concerns from Banco BPM, UniCredit is still moving forward with its expansion strategy. Still, the Italian government and financial analysts have been keen on the deal since it greatly impacts the country’s banking scenario. The shares of UniCredit did not budge a day after the announcement, whereas the stock of Banco BPM declined by a small margin.