Creval, Crédit Agricole’s final move, Equita’s tax benefits and interested councils
All the latest news on the Crédit Agricole takeover bid on Credito Valtellinese (Creval)
French final move on Credito Valtellinese.
Crédit Agricole announced late yesterday that it had increased the price offered for Creval by 16% from 10.5 to 12.2 euros per share, which will become 12.5 euros (+ 19%) if at the end of the period offer will be exceeded the threshold of 90% subscriptions.
The French group – which already has 17.7% – thus broke the delay well before the deadline for the takeover bid set for April 21, putting on the plate about 120 million more to convince the shareholders of the Valtellina institute to hand over the shares to Crédit Agricole Italia, the national branch led by Giampiero Maioli who technically launched the offer.
The Valtellinese bank has been under a public purchase offer since March 30, an operation announced before Christmas but immediately almost all the major shareholders have criticized the inadequacy of the consideration, equal to 10.5 euros per share. The improved offer, signaled by a press release from the French bank last night , raises the cash stakes and will pay each Creval share 12.20 euros, equal to a total outlay of almost 856 million from the initial 737 million. Indeed, in the event of subscriptions exceeding 90% of the total capital – a threshold that would make it possible to immediately revoke the listing of Creval – the French shareholders said they were willing to pay a further premium of € 0.30 per share, up to 12, 50 euros, equal to a total valuation of 876.2 million.
With this move, Agricole actually aims to close the game with the Valtellinese bank and with a shareholder base that immediately appeared reluctant to accept the initial offer, set at 10.5 euros, Il Sole 24 Ore stressed: from Alta Global to Hosking Partners, from Petrus Advisers to Kairos, up to Denis Dumont himself – recalled the Confindustria daily – many important shareholders in recent weeks have highlighted that they do not consider the French offer adequate, thus giving full support to the Board headed by Luigi Lovaglio, who not by chance judged the proposal on the table to be "not appropriate".
Analysts are now advising to join the new offer, even if it is below the minimum expected by the Lombard bank's advisors.
Equita Sim, advisor to Credit Agricole, notes that the new offer values Creval at an expected price / profit ratio in 2021-2022 equal, respectively, to 18.4 and 12.4 times, "well above the best-in class of the sector, with Intesa Sanpaolo, for example, traveling at 11.8 and 9.4 times ”.
Furthermore, the offer of the French recognizes, writes the Milanese Sim, 100% of the excess capital of Creval net of restructuring costs, "representing the only possibility for the shareholders of the Lombard group to have a capital buffer recognized otherwise difficult to distribute on a standalone basis ".
Finally, the offer allows shareholders to immediately recognize the value of the off-balance sheet DTAs, which “in the absence of M&A would be dependent on Creval's (uncertain) profit-generating capacity”, concludes Equita.
Il Sole 24 Ore spoke on the issue of tax benefits today: in the Creval Credit Agricole will find a fiscal “treasury” that it can immediately monetize with the merger and which can be quantified at almost 3 euros for each Creval share.
The 2021 Budget Law, which brings the date of 30 December 2020, has introduced a potential incentive to business combination processes carried out through mergers, spin-offs or company transfers.
In particular, the finance law, as the offer prospectus recalls, allows the transformation of the value of tax losses into a tax credit both in the event that the Dta (deferred tax assets) at this value are recognized in the financial statements and if they are not, against payment of a gross commission of 25% of the Dta, deductible for IRES and IRAP purposes.
“In the case of Creval, at 31 December 2020 Dta was recorded in the balance sheet for 81 million and another 180 million off balance sheet – remarked Antonello Olivieri del Sole – On its own date, Crédit Agricole had 136 million in Dta in its balance sheet. Against an estimated cost of 66 million, the group will benefit from a tax asset of 331 million, provided that the merger takes place within 12 months from the payment of the shares delivered in the offer: a nice "gift" considering that at 12.50 euros (the maximum price of the raise) the Creval is valued at 875 million ”.
“Even if all costs are attributed to the part contributed by Creval, the acquired bank will receive the contribution of 195 million net of potentially distributable capital, which, spread over 70 million shares of the former popular company, make 2.78 euros per share. Considering only the 180 million off-balance sheet, net of the portion of commissions, it would in any case be over 2 euros per share ”, concluded Il Sole .
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/creval-la-mossa-finale-del-credit-agricole-i-benefici-fiscali-e-i-consigli-interessati-di-equita/ on Thu, 15 Apr 2021 13:23:53 +0000.