Italy’s Bank Deals Trip Over Pushback From Investors and Rome | Company Business News-OxBig News Network

(Bloomberg) — For almost a year now, Italy has been at the center of a renaissance in European bank takeovers, with at least half a dozen deals proposed. So far, most are stuck in political opposition and competing investor interests.

Mediobanca SpA on Sunday became the latest example when it postponed an investor meeting to decide on its bid for Banca Generali SpA. The decision came as Chief Executive Officer Alberto Nagel faced potential defeat from shareholders opposing the acquisition.

A few weeks earlier, Italy’s markets regulator suspended UniCredit SpA’s tender offer for Banco BPM SpA to allow talks with the government over onerous conditions Rome has imposed on the deal. UniCredit CEO Andrea Orcel has said he’ll likely pull the deal because of the restrictions. 

The setbacks highlight the many obstacles in the way of consolidation in Italy and across Europe, with proposed transactions in Spain and Germany also in limbo. While governments and politicians have emerged as key constituents in bank mergers, competing investor interest and an intricate web of crossholdings also play a role, particularly in Italy.

The recent delays “may not be the last,” Bloomberg Intelligence analyst Lento Tang said in a note on Tuesday, citing “political risk.”

So far, one deal — Banco BPM’s acquisition of asset manager Anima Holding SpA — has been completed, Another one, the proposed acquisition of Mediobanca by Banca Monte dei Paschi di Siena SpA, hasn’t encountered any major delays since it was unveiled in January. Approval from the European Central Bank is expected soon, paving the way for the tender offer to kick off over the coming weeks.

Other transactions aren’t proceeding as planned. Here’s an overview where each deal stands:

Italy’s deal wave kicked off in early November as Banco BPM launched a bid for the asset manager Anima Holding SpA. The lender later improved the initial offer and it has since gained control of Anima.

Status: This is the first — and so far only — transaction of the current deal wave to go through.

Italian Government – Monte Paschi

Later that month, the Italian government under Prime Minister Giorgia Meloni sold a 15% stake in Monte Paschi. Rome’s plan was to use the privatization of the lender as a building block for a new large bank.

The shares were snapped up by a bunch of investors selected by the Italian government, namely Anima, Banco BPM, construction tycoon Francesco Gaetano Caltagirone and the Del Vecchio clan. Caltagirone and the Del Vecchios subsequently increased their holdings.  

Status: Rome still owns close to 12% and hasn’t disclosed any new plans to further cut its stake.

UniCredit launched a hostile bid for Banco BPM later that month to defend its position and create Italy’s largest lender.

The bid interfered with the Italian government’s plans for Banco BPM, and Rome later said it will only allow the deal to move forward if it fulfills several onerous conditions. UniCredit has labeled those restrictions as potentially unlawful and said it may pull the bid if they’re not clarified.

Meanwhile, Credit Agricole SA has been expanding its stake in Banco BPM, with which it has significant sales agreements, to defend its interest in Italy. The French bank’s asset manager, however, also relies on an important distribution agreement UniCredit that it wants to renew.

Status: UniCredit has contested Rome’s conditions in court, which is expected to reconvene July 9. The tender offer, which started on April 28, has been suspended for 30 days. It will resume next week.

A preliminary agreement unveiled by Italy’s largest insurer Assicurazioni Generali SpA and the French lender BPCE SA on Jan. 21 to combine their asset management operations and create Europe’s second-largest investment firms added more controversy.

Generali shareholder Caltagirone expressed concerns, with some Italian government officials privately agreeing with him, Bloomberg News has reported. Generali’s largest shareholder, Mediobanca, has backed the deal.

UniCredit entered the fray shortly after by unveiling a Generali stake that has grown to almost 7%. Orcel has maintained the investment is purely financial, and recently said he plans to gradually reduce the holding and ultimately exit it.

Status: The deal is expected to get signed in the summer and the two firms aim to close it early next year. Authorities including the Italian government will review the deal after the signing. 

Monte Paschi – Mediobanca

Just a few days after the asset management announcement, Monte Paschi launched a hostile takeover approach for Mediobanca, the largest Generali shareholder. 

Mediobanca has been fighting the acquisition, saying it has no industrial logic and would be “destructive.” But the bid has backing from the Italian government as well as from Monte Paschi shareholders Caltagirone and the Del Vecchios. An investor meeting has authorized Monte Paschi to pursue the deal. 

Once again, UniCredit has popped up amid the clashing factions by registering a 1.9% stake in Mediobanca, Bloomberg News has reported.

Status: ECB approval for the deal is expected as soon as next week and the tender offer could kick off in early July. Monte Paschi has indicated it may lower the acceptance threshold. 

Mediobanca – Banca Generali

Mediobanca CEO Alberto Nagel made a counter move on April 28 by launching a takeover bid for Banca Generali, effectively offering to give up the large stake his bank holds in the insurer in return for ownership of its private banking arm.

Generali, which controls the unit, has yet to say if it supports the proposal. Caltagirone does not, while UniCredit was getting ready to join a group of investors including the Del Vecchios who plan to abstain at a Mediobanca shareholder meeting, Bloomberg News has reported. 

Status: Mediobanca has since postponed that meeting, initially scheduled for Jun. 16, to Sept. 25 as Nagel tries to drum up support for the deal. 

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