The gross cost synergies estimated by UniCredit at 900 million are “more than a third of Banco Bpm’s cost base” and for this reason “raise strong concerns about the foreseeable repercussions on employment and social levels”. The board of directors underlines this after analyzing the rival’s offer. “Moreover, these synergies, like the revenue synergies, are not valued at all in the conditions of the offer” we read in a note.
The board of directors of Banco Bpm effectively rejects UniCredit’s offer judging it inadequate, “an offer that was not in any way previously agreed upon” Piazza Meda specifies in a note.
The rejection
The board of directors «unanimously notes, preliminarily and in the best interests of the shareholders, that the offer indicates a unit consideration, entirely in shares, which reflects a premium of 0.5% compared to the official price of Banco Bpm on 22 November , and an implicit discount of 7.6% compared to yesterday’s official price. These conditions (price, ed.) are completely unusual for operations of this type”. In fact, it’s a failure. The board of directors recalls that «the market has in fact recognized Banco Bpm’s strong execution capacity, outperforming the announced plan objectives and promoting important initiatives to strengthen the structure of the product factories. These operations made it possible to create value for shareholders and all other stakeholders significantly strengthening the Bank’s competitive positioningwhich today ranks among the players with the best growth prospects in the current market scenario, in a position to extract an even more important contribution from the product factories in the future, while reducing its exposure to the risk of a reduction in interest rates ».
The German precedent
The board of directors recalls the risks connected «to the outcome of the expansion initiatives launched by UniCredit in Germany as well as to a significant dilution of the current geographical exposure which, instead of an attractive concentration of Banco Bpm in the most dynamic regions of the country and the Eurozone, would reposition itself on areas currently characterized by lower growth and greater geopolitical risk.”
Last but not least, the bank is now subject to the so-called passivity rule which «will affect the strategic flexibility of the group, in particular with reference to the conditions of the public purchase offer on Anima Holding and the recent investment in the capital of Banca Monte dei Paschi di Siena, determining thus a picture of high uncertainty.” «The management’s room for maneuver on an autonomous basis is therefore limited, as in recent years it has demonstrated a strong track record in terms of organic growth and extraordinary initiatives».
The Gloves Are Off: Banco Bpm Tells UniCredit to Bugger Off
Ah, the Italians, always so passionate, always so…Italian. And today, the board of directors at Banco Bpm has given UniCredit a resounding "va’via" (that’s "bugger off" for you non-Italians) in response to their takeover offer. It’s like a juicy plate of spaghetti – a mess, but a glorious one.
Apparently, UniCredit thought they could just waltz in, waving a few shares, and Beledone! – expect Banco Bpm to swoon into their arms. But no, no, no. The board has put their foot down, saying the offer is "inadequate" and "unusual" (read: crap). I mean, who tries to buy someone with a 0.5% premium? That’s like me trying to buy a pint down at the pub with a few pennies and a used tissue.
The Numbers Don’t Add Up
Let’s talk turkey (or in this case, euros). UniCredit’s offer values Banco Bpm at a 0.5% premium to its official price on November 22nd. That’s like valuing a Ferrari at the price of a used Vespa. And if we look at yesterday’s price, it’s an implicit discount of 7.6%. That’s not a discount, that’s a rip-off!
The board is having none of it, pointing out that Banco Bpm has been a star performer, outdoing its plans and strengthening its positioning in the market. It’s like trying to buy a winning racehorse with a coupon for a packet of pasta. Not gonna happen, mate.
German Precedent: A Televised Train Wreck
And then there’s the matter of UniCredit’s expansion in Germany. Now, I’m no expert, but I do know that’s like trying to make a soufflé without the cheese – it’s a recipe for disaster. The board is worried that Banco Bpm will get dragged into this mess, diluting its exposure to the more dynamic regions of Italy and Europe. Ah, but that’s not all – UniCredit’s German venture is like a dark cloud on the horizon, threatening to rain on everyone’s parade.
Rule of Law (and Accountancy)
But wait, it gets better! Banco Bpm is now subject to the "passivity rule", which will, ahem, "reduce" the group’s strategic flexibility. Ah, that’s Italian for "we can’t do anything now, thank you very much". And let’s not forget the pending public offer on Anima Holding and the Banca Monte dei Paschi di Siena investment – that’s a can of worms the size of the Leaning Tower of Pisa.
Parting Shot
So, it seems UniCredit has been left dangling like a pinata at a children’s birthday party, swinging in the wind, unloved and unwanted. As for Banco Bpm, they’ve given them a polite but firm "grazie, no". After all, as the great philosopher, Rowan Atkinson (that’s me, by the way), once said, "You can’t buy class, but you can buy a really expensive suit." UniCredit, it seems, has simply not brought their A-game to the table.
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The Rejection of UniCredit’s Offer
Following a thorough analysis of UniCredit’s proposal, the board of directors of Banco BPM has expressed strong reservations regarding the estimated gross cost synergies of €900 million, which exceed one-third of the bank’s cost base. This raises significant concerns about the potential repercussions on employment and social levels, as the enormous slash in costs would undoubtedly lead to substantial job losses and negatively impact the community.
The board of directors of Banco BPM has effectively rejected UniCredit’s offer, deeming it inadequate and non-negotiated, according to a statement released by Piazza Meda. The decision was made after a comprehensive evaluation of the proposal, which failed to meet the bank’s expectations.
The Rejection
The board of directors of Banco BPM unanimously noted that UniCredit’s offer, consisting entirely of shares, reflects a meager premium of 0.5% compared to the bank’s official price on November 22 and an implicit discount of 7.6% compared to the previous day’s official price. This unusual pricing structure is deemed unsuitable for operations of this nature, making it an unfeasible proposal. In fact, the board views this offer as a failure. The bank’s strong execution capacity, outperforming announced plan objectives, and its initiatives to strengthen product factories have been recognized by the market, resulting in substantial value creation for shareholders and stakeholders, and significantly enhancing the bank’s competitive positioning.
The German Precedent
The board of directors also highlighted the risks associated with UniCredit’s expansion initiatives in Germany, which could lead to a significant dilution of Banco BPM’s current geographical exposure. Instead of maintaining a strong presence in the most dynamic regions of Italy and the Eurozone, the bank would be repositioned in areas characterized by lower growth and higher geopolitical risks, negatively impacting its future prospects.
Furthermore, the bank is now subject to the so-called passivity rule, which will limit the strategic flexibility of the group, particularly in relation to the public purchase offer on Anima Holding and the recent investment in Banca Monte dei Paschi di Siena’s capital. This will create a scenario of high uncertainty, restricting the management’s room for maneuver on an autonomous basis, which has previously demonstrated a strong track record in terms of organic growth and extraordinary initiatives.
