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All the effects on Anima and Arca with the wedding between Banco Bpm and Bper

3 years ago babelfish

All the effects on Anima and Arca with the wedding between Banco Bpm and Bper

The hypothesis of a merger between Banco Bpm and Bper is becoming increasingly popular. The point of the situation with the latest rumors, bank statements, analyst comments and scenarios for Anima and Arca

What happens on the Banco Bpm-Bper dossier? Here are facts, numbers, rumors and analyzes, with the scenarios on Anima and Arca.

WHAT REUTERS HAS WRITTEN ON BANCO BPM AND BPER

Banco Bpm and Bper, according to Reuters , could merge in the first half of 2021. The merger hypothesis was ignited with the words of Carlo Cimbri, CEO of Unipol, the main shareholder of the Emilian bank with about 20%, according to which a fusion between the two former popular would be fascinating. Banco Bpm's CEO, Giuseppe Castagna, immediately welcomed Cimbri's statements. The CEO of Bper, Alessandro Vandelli, did not slow down on the M&A front but nevertheless said that the group is currently focused on the integration of the branches of Ubi Banca acquired as part of the Opas of Intesa Sanpaolo. For analysts, a merger between Banco Bpm and Bper would make sense both from an industrial and a strategic point of view and would bring benefits to both banks. According to the experts, however, there will be the issue of how the aggregation could take place considering the different valuations of Banco Bpm and Bper. Furthermore, for some analysts, a transaction between the two banks, regardless of the methods, could trigger a deal between Anima Holding (19.4% owned by Banco) and Arca Sgr (controlled by Bper with 57.1% ).

THE LATEST INDISCRIPTIONS ABOUT THE MERGER BETWEEN BANCO BPM AND BPER

Reuters reported last week that Banco Bpm and Bper in the second quarter of 2021 could reach an agreement for an equal merger to be carried out card for card. Work on the aggregation should begin concretely next year. The transaction between the two banks would give rise to a large banking center with 300 billion in assets and a stable shareholding structure. At the moment, however, writes the Sole24Ore , Bper has not appointed advisor, while Banco Bpm has already selected Lazard.

CIMBRI (UNIPOL) TURNS ON THE HYPOTHESIS OF AGGREGATION

The hypothesis of a merger between Banco Bpm and Bper was ignited following an interview that the CEO of Unipol, Carlo Cimbri, released on November 20 to Sole24Ore. On this occasion, the CEO of the main shareholder of the Emilian bank with a stake of approximately 20% defined the idea of ​​a combination between the two former popular companies as “fascinating” and to be explored with “great attention”.

BANCO BPM WELCOMES THE WORDS OF CIMBRI WITH PLEASURE

Banco Bpm's chief executive officer, Giuseppe Castagna, immediately welcomed Cimbri's statements, highlighting that the bank is interested in exploring mergers with a strong industrial value aimed at creating value for shareholders. Castagna's ambition is precisely to find a partner well positioned in Northern Italy and with a strong project in the regions where Banco Bpm is present.

BPER DOES NOT STOP M&A BUT NOW FOCUS ON INTEGRATION OF UBI BRANCHES

The CEO of Bper, Alessandro Vandelli, welcomed Cimbri's words as a stimulus for growth, specifying however that the Emilian bank is currently focused exclusively on the integration of the branches of Ubi Banca acquired as part of the Opas di Intesa St. Paul. During a press conference at the beginning of December Vandelli then specified that he did not want to accelerate or slow down the M&A activity, "I just want to say that our total focus is on the integration of the Ubi Banca business unit", a very long which will be finalized in early 2021.

FOR INTESA SANPAOLO THE MERGER OF BANCO BPM WITH BPER IS A REALISTIC SCENARIO

Intesa Sanpaolo believes that the merger between Banco Bpm and Bper is a realistic option in the current scenario. The operation would in fact make industrial sense and would give rise to the second Italian banking group with a market share of around 15% and a widespread presence in Italy, a pole supported by a common corporate culture and a solid capital base. In an aggregation scenario, analysts estimate cost synergies of € 400 million, with the costs of integration and reduction of the NPE ratio to 5% which could be almost entirely offset by the transformation of the DTA (Deferred Tax Asset) into tax.

MEDIOBANCA APPRECIATES THE AGGREGATION HYPOTHESIS

Mediobanca Securities thinks that the possible merger between Banco Bpm and Bper would make sense both from an industrial and a financial point of view, also in light of the benefits linked to the transformation of DTAs into tax credits. A peer merger, which values ​​B for 0.45 times the price / tangible equity multiple, would allow both banks to have an increase of more than 30% in earnings per share. In an aggregation scenario, Banco Bpm's price could rise by approximately 25% (€ 2.25 the target price of Mediobanca Securities), while that of Bper by approximately 35% (€ 2 the target price of analysts).

MERGER BETWEEN EQUALS, EVERYONE MIGHT NOT LIKE

Equita Sim also appreciates the hypothesis of merger between Banco Bpm and Bper but is keen to make a clarification on the way in which the combination could take place. The hypothesis of an equal card-against-card transaction reported by Reuters could in fact give rise to the opposition of the fragmented share base of Banco Bpm considering the different valuations of the credit institutions (Bper has a market capitalization of approximately 2.1 billion euros and trades at 0.36 times the price / Tangible equity multiple, while Banco Bpm has a capitalization of around 2.8 billion euros and trades at 0.26 times the price / Tangible equity).

That said, Equita Sim also recognizes the potential benefits of a possible merger, regardless of how it might take place. For analysts, the combination would make sense from an industrial point of view considering the complementarity of the distribution networks of the two banks. Furthermore, the experts continue, the combined entity that would arise from the operation would have a solid capital position (Cet1 ratio in the area of ​​13%), an asset quality in line with its competitors (Npe ratio at 5% after the reduction process risk) and an excellent competitive positioning (market share in Lombardy of around 20%), reasons why the combined entity would continue to have a certain speculative appeal in the medium term.

TRANSACTION BETWEEN BANCO BPM AND BPER CAN TRIGGER DEAL ANIMA-ARCA

Furthermore, Equita Sim thinks that with the merger between Banco Bpm and Bper, the chances of attending a contribution of Arca in Anima would increase, an operation that would make sense from an industrial point of view, would be sustainable without a capital increase, would have the possibility of extracting synergies of cost and create value for Anima shareholders.

Mediobanca Securities agrees, which in a merger scenario between the two former popular companies considers an aggregation between Anima and Arca “highly probable”, an operation that would bring significant benefits to Anima. Analysts think Anima could self-finance the deal thanks to the 350-400 million euros of available cash. Arca Sgr is controlled by Bper and Banca Popolare di Sondrio which respectively hold 57.1% and 36.8% of the share capital, while Banco Bpm owns 19.4% of Anima.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/anima-e-arca-nozze-fra-banco-bpm-e-bper/ on Mon, 14 Dec 2020 10:10:42 +0000.