All the scazzi between Creval shareholders over the Crédit Agricole takeover bid
The price of the takeover bid that Crédit Agricole Italia has launched on Creval causes the shareholders of Creval to discuss. Here are all the differences, who will join the offer and who will not, the analysts' comments and the scenarios.
Crédit Agricole Italia's proposal for 100% of Credito Valtellinese causes the top management and shareholders of the Italian bank to discuss: the Board of Directors of Creval defines it as "unexpected and not agreed", the Petrus Advisers fund "inadequate" and "opportunistic", while Algebris has already declared that it will join the takeover bid. There are also different opinions among analysts. For Banca Akros, the offer of 10.5 euros per share of the Italian division of the French group does not fully reflect the value of Creval that derives from the transaction and therefore at 50% there could be a counter-proposal. On the same line of thought Mediobanca Securities, according to which the price of the takeover bid recognizes to the shareholders of Credito Valtellinese only 30% of the value that is released with M&A. For Equita Sim, however, the offer is interesting. Crédit Agricole Italia, for its part, believes that it has already awarded an extra-premium to the shareholders of the Italian credit institution, considering the offer is entirely cash.
THE TENDER OFFER OF CRÉDIT AGRICOLE ITALIA ON CREVAL
Monday, November 23 Crédit Agricole Italy, a subsidiary 75.6% owned by Crédit Agricole, has launched an ' Offer voluntary public purchase with cash consideration of 10.5 euro per share of Credito Valtellinese. The price equates to a total investment of 737 million euros. In any case, to know all the details of the offer, it is necessary to wait at least until Friday 11 December, the deadline by which Crédit Agricole Italia must file the document relating to the takeover bid with Consob.
THE COMMENT OF THE BOARD OF CREVAL AT THE OPA
A press release issued by Creval on 25 November states that the bank's Board of Directors met to examine the voluntary public tender offer on all the shares of Credito Valtellinese which is defined as "unexpected and not agreed". The Board of Directors, as usual, has given a mandate to the CEO of the Italian bank, Luigi Lovaglio, to appoint the financial and legal advisors to evaluate the offer.
THE ADVISORS
Credito Valtellinese has appointed BofA Securities, Mediobanca – Banca di Credito Finanziario and Intermonte Sim as financial advisors and the Cappelli Rccd law firm as legal advisor who will assist the Board of Directors of Creval in carrying out the evaluation activities of the information made public so far and of the Document offer once available.
SHAREHOLDERS OF CREVAL
Creval is held by Crédit Agricole for 9.847%, by the Altera Absolute Investments fund with 7.07%, by the French Denis Dumont with 5.784%, by Algebris with 5.38% and by Hosking Partners with 4.596%. The stake held by the Petrus Advisers fund is not known. The London-based investment company probably holds a stake of less than 3%, a new threshold beyond which the obligation to notify Consob and the market would be triggered.
ALGEBRIS WILL JOIN THE OPA
The Algebris fund, headed by Davide Serra, has already sent a letter of intent to Crédit Agricole declaring itself ready to join the takeover bid with its share. “For us, the Agricole offer is a good offer which makes the operation“ win win ”: Creval is given medium-long term stability, Agricole finds an excellent partner. A hypothetical merger with Banca Popolare di Sondrio, to say, would not have been similarly effective for Creval because it would have concentrated the problems and created overlaps. We would not have supported it ”, Serra said in the course of an interview in recent days:“ We have said that we adhere to the takeover bid and will receive, once the offer is authorized and effective, what is expected. By saying that we join, we want to facilitate the operation because we believe in it: Agricole is the French Intesa Sanpaolo, it is historically rooted in the territory, it has long-term shareholders and a diversified and sustainable business model. Creval, which was a cooperative bank and fortunately transformed itself into a Spa, would join a solid and profitable group ”.
FOR PETRUS INSTEAD THE OFFER IS NOT ADEQUATE
Petrus Advisers, the fund set up in 2009 by the Viennese Klaus Umek, former investment banker of Goldman Sachs, instead sent a letter to the Board of Directors expressing concern about Crédit Agricole Italia's offer, defining it as "inadequate", "opportunistic" and which "underestimates ”The credit institution. The takeover bid awards Creval shareholders a premium of 21.4% compared to the closing prices of the stock on Friday 20 November: for the London-based investment company this level is much lower than the average premium of 25% -35% about comparable M&A transactions in Italy. Furthermore, according to Petrus estimates, the fair value of the Creval on an autonomous basis is greater than 14 euros per share. The fund therefore announced that it will not offer its shares under the takeover bid at the current price.
PETRUS RECOGNIZES M&A VALUE, THE PROBLEM IS 'ONLY' THE PRICE
Petrus Advisers thinks Creval alone has a bright future, considering it is on track to achieve the plan's goals by 2023, but at the same time it is not against M&A. Indeed, the fund believes that an aggregation between Creval and a strategic partner could unlock substantial value. However, for the London-based group any partnership should only be pursued on fair and reasonable terms and when it maximizes value for all shareholders.
THE GOAL OF PETRUS
The Petrus Advisers fund, which manages assets of around 700 million euros, aims to obtain an increase in the French offer. The London-based group, writes Milano Finanza , has already proposed itself in the past as the representative of the interests of small shareholders and minority shareholders in extraordinary transactions. Starting from 2017, for example, Petrus has set up an 8% stake in Comdirect, an online bank controlled by Commerzbank that the German bank intended to acquire 100% by offering 11.4 euros per share, a proposal deemed too low by the fund. After two and a half years of battle, in February 2020 Commerzbank managed to delude Comdirect, paying however 15.15 euros per share.
THE DEFENSE OF CRÉDIT AGRICOLE ITALIA
Crédit Agricole Italia, for its part, believes that it has already offered an extra-premium to the Creval shareholders considering that the takeover bid is based on a completely cash offer.
THE CREVAL TITLE ON THE STOCK EXCHANGE
The title Creval Stock Exchange, ended the session Friday, November 27 with a -1.47% to EUR 11.33, thus remaining above the cash consideration offered by Crédit Agricole Italy 10.5 euro. A clear signal that the market continues to expect an improvement in the proposal made by the Italian-French bank.
FOR AKROS OPA DOES NOT REFLECT CREVAL VALUE, 50% RELAUNCH
For Banca Akros, the price of € 10.5 per share offered by Crédit Agricole Italia “does not fully reflect the value of Creval deriving from the transaction”. In fact, analysts estimate a value creation of around 560 million euros (or 8 euros per share) thanks to the extraction of synergies in the M&A scenario. Based on this reasoning, the experts attribute a probability of 50% to a counter-offer on Credito Valtellinese and for this reason they decide to raise Creval's target price to 12.4 euros from 10.5 euros, confirming the accumulated recommendation.
FOR MEDIOBANCA OPA GRANTS CREVAL SHAREHOLDERS 30% OF THE VALUE
Mediobanca Securities (outperform rating, target price of 13 euros on Creval) also thinks like Banca Akros. According to analysts, in fact, the Crédit Agricole Italia offer recognizes only 30% of the value of the M&A to the Creval shareholders. According to experts' estimates, the total value that Creval could create for Crédit Agricole Italia with a merger amounts to 1.4 billion euros, or 20.3 euros per share. This valuation is based on: 2022 net profit of 30 million euros (3 euros per share), 150 million euros of synergies net of 0.2 billion euros of integration costs (7.2 euros per share), 400 million euros of excess capital in 2022 (5.8 euros per share), 400 million euros of benefit from the conversion of DTAs (5.2 euros per share), 1.2 billion euros of NPE sales to bring the combined ratio of NPE at 5% (-0.9 euro per share). The standalone valuation of Creval for Mediobanca Securities is 6.4 euros, which leaves a value of 13.9 euros for M&A. Thus, with an offer of 10.5 euro cash per share, Crédit Agricole Italia is allocating only 30% of the value that is released with M&A to the shareholders of Credito Valtellinese. Analysts believe that an increase in the offer is possible, perhaps after the possible approval in the next Budget Law of the rule relating to the conversion of DTAs (Deferred Tax Assets) into tax credits in the event of M&A, an element that could be worth 400 million euros. or € 5.2 per share.
OFFER IN PART LOW RANGE KEPLER CHEUVREUX
Kepler Cheuvreux (hold recommendation on Creval) reported that the takeover bid price of 10.5 euros per share is in the lower part of its range of 10-13 euros, a value estimated by analysts for the acquisition of the bank.
SECOND EQUITA SIM INSTEAD THE OFFER IS INTERESTING
Equita Sim (rating hold, 10.5 euro target price on Credito Valtellinese), unlike the other experts, defined the tender offer price as “attractive” for Creval shareholders. Crédit Agricole has chosen Equita and JPMorgan as consultants.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/tutti-gli-scazzi-fra-i-soci-creval-sullopa-di-credit-agricole/ on Sun, 06 Dec 2020 06:50:43 +0000.