Cimbri di Unipol will celebrate the wedding between Bper and Banco Bpm
The role of Unipol in the proposed marriage between Banco Bpm and Bper after the rumors of Reuters. Facts, numbers and analysis
Interested bankers get excited, analysts are warming up, advisors are already looking forward to lavish commissions, but on the stock market the securities in question – namely Banco Bpm and Bper – do not heat up despite the rumors and indiscretions that are piled up, most recently those of yesterday by Reuters .
This is what happens and does not happen in the next future risk – and much coveted by the ECB as well – between Banco Bpm and Bper.
The merger between BancoBpm and Bper could take shape in the first half of 2021. The Anglo-Saxon press agency Reuters reported yesterday.
REUTERS INDISCRIPTIONS ABOUT BPER AND BANCO BPM
The possible merger between the two former popular has become topical after in recent days the CEO of Unipol, Bper's largest shareholder with 18.9% , with Il Sole 24 Ore defined the merger project between the two realities. An opening to which the CEO of BancoBpm himself, Giuseppe Castagna, had given credit very quickly, thus fueling the interest of the market, the Confindustria daily stresses today. "In this context, the CEO Alessandro Vandelli in recent days highlighted that the bank today is" fully focused "on integrating the approximately 630 Ubi branches, underlining that Cimbri's words are" more a stimulus than a precise indication "" .
THE ADVISORS AT WORK
At the moment, however, there are no advisors appointed by Bper while Lazard would be the advisor for BancoBpm.
THE TIMING BETWEEN BANCO BPM AND BPER
Reuters yesterday, which indicated the timing of the transaction in the first half of 2021, based on three sources who reported ongoing assessments by the two banks involved. A more probable consolidation in the second quarter, after the Modenese institute led by Alessandro Vandelli has absorbed the Ubi branches taken over by Intesa, costing an 802 million increase in fresh capital. And after the board of Bper will be renewed in April.
THE MEDIOBANCA REPORT ON BANCO BPM AND BPER
What do analysts think? Most of them seem positive. Mediobanca Securities believes that the agreement "would make sense from an industrial and financial point of view, potentially accelerated by the benefit of the DTA, deferred loans, to be used only in 2021". On the tax bonuses, valued at around 1 billion euros by Banco Bpm, the market expects a lively confrontation in Parliament in the coming days between the Pd that supports them via Mef and the M5S in favor of a ceiling of 500 million euros, remarks Mf .
THE ROLE OF BADWILLS
Badwills also support extraordinary transactions, as the Ops of Intesa Sanpaolo taught on Ubi. If 2021 opens with Banco Bpm-Bper, the result is the birth of the third banking group in Italy with 310 billion euros of assets and 115 billion Rwa, explains Mediobanca. The market share of the branches would have almost doubled and spread throughout Italy with 64% concentrated in Northern Italy.
BETWEEN NUMBERS AND INDEXES OF BPER AND BANCO BPM
The operation is hypothesized by the analysts of Piazzetta Cuccia recognizing, in the base case, a swap ratio of 0.77 which corresponds to a recognition of Bper at 0.33 times the Price / Tangible Equity. The Modenese group would eventually have 42% of the combined group. The new reality should have a capital solidity index, in 2021, the Cet 1 ratio, of 12.5% (over 13% in 2022), a dividend yield of 4.7% and a RotE of 4.9%.
WHAT MEDIOBANCA ANALYSTS SAY ABOUT BANCO BPM AND BPER
If, on the other hand, a peer merger is assumed in which both banks end up with a 50% stake in the combined entity, in this case Bper is valued at 0.45 times the P / TE. With the effect that the shareholders of both banks "will be able to enjoy a 30% increase in earnings per share", writes Mediobanca. Piazzetta Cuccia assumes synergies for about 10% of the combined cost base in 2022 or about 20% of those of Bper and the recognition of 1.1 billion Dta converted into tax credits, of which 25% in 2021 and the rest in 2022. In addition to a payout ratio of 30% in 2021-22 and zero in 2020.
WILL SHAREHOLDERS CELEBRATE?
The transaction could bring value for Banco Bpm shareholders of 25% compared to the current price of the stock (now 1.8 against a target price of 2.25 euros) and for those of Bper of 35% (1.48 euros on value now, 2 euros the target price). For Mediobanca, the conversion of the DTAs could cover 90% of the costs to bring the NPE ratio to 5% and those of integration.
THE EQUITA REPORT ON BANCO BPM AND BPER
The operation, according to Equita Sim, would make sense from an industrial point of view given the complementarity of the distribution networks, with the new bank becoming the second Italian operator with a market share of 14% in terms of branches. According to Reuters , Bper is aiming for an equal deal, a scenario “that could find opposition from the fragmented shareholder base of Banco Bpm”, notes the Milanese SIM, considering the different valuations of the two groups.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/cimbri-di-unipol-celebrera-le-nozze-fra-bper-e-banco-bpm/ on Fri, 11 Dec 2020 11:37:22 +0000.