Here are the virtues of Mps according to Mediobanca (Treasury advisor on Mps)
Like Mediobanca, it pampers Mps at the behest of the Treasury, looking for other banks that want to digest the Monte. Will it be Unicredit? Mediobanca itself for the group that will be chaired by Padoan, however, sees well Bnp Paribas …
Come on siori, come on.
Take this beautiful and historic bank: it's a bargain.
It is well known that sellers emphasize the positive aspects of the object for sale.
So it is not too surprising if Mediobanca – advisor to the Treasury on Mps – portrays the possible purchase of Monte dei Paschi di Siena ( with all the bubo of the lawsuits ) as a real bargain, also considering the good offices governmental.
THE VALUABLE MPS ACCORDING TO MEDIOBANCA
For anyone who buys MPS, Monte will create between 5.2 and 7.8 billion of "new value": from 4.3 and 6.5 times what Mps shares on the stock market, Mediobanca has put pen to paper in a confidential report , presented to the board of directors of Mps.
THE SCENARIOS FOR MPS
A scenario opposite to the one that scares Unicredit shareholders , with which the Treasury – which fell to 64.23% of Mps with the splitting of 8.1 billion of acid credits to Amco – has been weaving a plot since July.
MEDIOBANCA'S WORK ON MPS
Mediobanca believes that post-merger MPS (not necessarily with Unicredit) would make between 290 and 482 million in net profit more, writes Repubblica : "Sum made up of savings on personnel up to 525 million, lower cost of funding up to 173 million, and 160 million more interest margin. To a multiple of 10, these profits add from 2.9 to 4.82 billion of capitalization, to which the analysis adds up to 854 million for a greater "density" of risk assets on the capital, and 2.2 billion of credits d 'tax that an article of the Finance Act will allow to capitalize in the event of mergers in 2021: and we reach 5.2-7.8 billion of the total ”.
THE BENEFITS OF DTA
The estimated benefits for the DTAs are an indication that the “pilot” merger for Mps (and Mediobanca has been working on it for months) is with Unicredit: the only one that would transform all the 3.7 billion gross of uncertain tax assets into capital.
WHAT REPUBLIC HAS REVEALED ABOUT MEDIOBANCA-MPS
Repubblica adds: "The presentation of Mediobanca, requested by the board of directors on Thursday, seems to be a move by the directors in favor of the wedding (the majority headed by president Patrizia Grieco) to avoid the solo plan that CEO Guido Bastianini is sketching with Oliver Wyman , but it could hardly allow the Treasury to recapitalize the 2 billion euro of the prospective “hole” without provoking the findings of the EU Antitrust ”.
MPS IN UNICREDIT?
Will Mps go to Unicredit then? Mediobanca also in this case has a gush of ideas and suggestions.
After Mustier's farewell, Mediobanca Securities in a report on December 1st speaks of Unicredit as a “safe boat” but which has no one at the helm while a storm is underway. Thus, for the analysts of the Piazzetta Cuccia institute headed by the CEO, Alberto Nagel, "the void created in the leadership, the good evaluation of the bank in Piazza Gae Aulenti and the solid fundamentals of the credit institute could induce players stronger ”to try to take control of the Unicredit ship.
So?
Therefore Mediobanca Securities considers Unicredit as “a key strategic option for French banks to enter Germany and to increase access to European companies for CIB (Corporate & Investment Banking) activities”. Thus, although far from obvious, “a similar ending would certainly have ironic and paradoxical connotations: a more fragile Unicredit equals more difficult domestic M&A and greater chances of French control”,concludes Mediobanca Securities .
Going backwards, Mediobanca's brilliant scenarios also foresee other perspectives.
The Piazzetta Cuccia analysts have speculated in mid-October a series of simulations in Europe to see where would create more value for the banks and their shareholders, with the effect that one of the most effective combinations would be between Unicredit and BNP Paribas, has written Mf .
So the perfect wedding for Unicredit would be with the French of Bnp Paribas according to Mediobanca Securities (while Mediobanca works for the Treasury, which did not breathe, on the contrary …, for the de facto torpedo of Mustier by the board of Unicredit soon chaired by the former Minister of the Treasury, Piercarlo Padoan).
Here is an excerpt from Mf's article dated 13 October 2020:
For analysts, the creation of an MPE type structure (Multiple point of entry model), may not even be necessary in the case of a combination with Bnp Paribas, considered "the least weight of Italy in pro-forma activities ". And it would therefore be a cost saving. A bank adopts a multi-point-of-entry resolution if it plans to allow the resolution of several operating branches in different jurisdictions separately under national law, with the calculation of liabilities locally, then state by state.
The brokers calculated 0.7 billion savings resulting from overlapping businesses, a 40% cut in basic costs and a restructuring of Cib, investment banking, which on the one hand would cost 1.1 billion, on the other hand cleaning operation would then lead to higher revenues for 0.7 billion. To which then add 0.7 billion in additional revenues from a reduction in the cost of funding. In this case, because the cost of public debt both in Germany and in France is significantly lower than in Italy.
The operation would make sense, according to the brokers, with a premium of 30% on Unicredit values, therefore around € 9.6 per share in an all-paper-for-paper deal that sees the exchange of 0.29 Bnp Paribas shares for 1 share of the Italian bank.
An international M&A hypothesis of this type, hitherto put aside due to the lack of a single regulatory framework in the EU on the banking front, arises for three reasons, explains Mediobanca. The first is that after the arrival of the Recovery Fund at the beginning of 2021, countries will once again talk about a union not only of capital but also of banking. Secondly, the ECB has long supported M&A to create European champions to grow in competition with the American and Chinese giants. Third point, Covid-19 will act as a catalyst, clearly separating solid banks from those with previous problems and fragile feet.
For Piazzetta Cuccia analysts, Unicredit appears to be the only bank that, aggregated to a French group, would become a "world-class reality, reaching up to 70% of the population in the EU". In the meantime, visibility on the profits of 2021 remains low, when the weight of NPLs will be felt due to the pandemic. In the meantime, Unicredit will publish the quarterly report as of September 30th on November 5th.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/mps-mediobanca-advisor-del-tesoro-su-mps/ on Thu, 03 Dec 2020 14:00:18 +0000.