Here is how Mediobanca offers Mps to Unicredit, Bpm and more
According to Mediobanca, whoever merges with MPS will be able to benefit from tax credits linked to the heavy losses of the Sienese bank. Will Unicredit or Banco Bpm be convinced by Mediobanca and Mef? Facts, names, numbers and indiscretions
Great maneuvers, and great concerns, for the future of Monte dei Paschi di Siena. Here are all the latest news on the group that will be at a loss until the end of 2022, as pointed out by the leaders of Mps ( here the in-depth analysis of Start Magazine )
THE POINT ON THE MOUNTAIN
The fate of MPS returns to the spotlight with the Ministry of Economy headed by Roberto Gualtieri (Pd) to find a future for the Sienese institute, as promised to the EU, given that the Treasury will have to go down in the shareholding of Monte.
THE RUMORS OF BLOOMBERG AND REPUBLIC ON MPS
The rumors, reported yesterday by Bloomberg and Repubblica , of contacts between the men of Mef and Unicredit, the ideal candidate for a position in Siena, had the effect yesterday of taking off the title of Monte dei Paschi di Siena (+3.9 % to 1.34 euros) and ballast that of Unicredit (-1.9% to 6.96 euros).
THE POSITION OF UNICREDIT
The banking group led by the CEO, Jean-Pierre Mustier, as usual opposed a "no comment" to the rumors, limiting himself to remembering how Mustier has always excluded M&A from the horizon of his plan.
NEUTRALITY
It is not known whether the head of Unicredit, also in the light of Intesa Sanpaolo's blitz on Ubi Banca, can retrace his steps. But an essential condition for this to happen is that any transaction is neutral on the capital position of Unicredit, wrote Ansa .
THE QUALITY OF MPS?
To ensure the bank maintains a "cet1 higher than 13%", according to Equita, MPS would need a dowry of "about 4 billion", a figure that does not include the necessary increase in provisions on legal risks, equal to 600 million on a petitum of 10 billion ( here the in-depth study by Start Magazine on legal cases ). The Treasury would once again pay (the Mef in fact controls the MPS), in an operation that would follow the sale of the Venetian banks (Popolare di Vicenza and Veneto Banca) to Intesa Sanpaolo.
ESTIMATES OF EQUITY
Equita has calculated that, in the face of 2 billion euros of integration costs, the neutrality on equity (Cet 1 pro forma ratio of the new group that would be formed greater than 13%), requires a recapitalization of 4 billion, " but without considering the coverage of legal risks ".
THE CALCULATIONS OF THE ANALYSTS
For the Sim – wrote Radiocor – the hypothesis the resources already allocated by the Mef for 1.5 billion are sufficient to proceed with the spinoff of non-performing loans (NPE) to Amco and complete the derisking process, but they may not be sufficient to make the bank even more attractive from an M&A perspective, even assuming an intervention by Unicredit.
WHAT MEDIOBANCA DOES ACCORDING TO CORRIERE DELLA SERA
However, according to Mediobanca – as reported today by Corriere della Sera – whoever merges with Mps will be able to benefit from an "unexpressed assets" of 3.6 billion (in technical terms "Dta", deferred tax assets), or tax credits linked to the enormous losses of the Sienese bank. This is one of the strong points of the Mps dossier carried out by the Treasury, a 68% shareholder, by the advisor Mediobanca and by the institute's CEO, Guido Bastianini.
CAPITAL DEFICIT
According to other analysts, the capital deficit, taking into account the situation in the second quarter, would be 1.4 billion, which would rise to 2 billion considering the spin-off of the 8.1 billion gross impaired loans (sale to Amco) and about 3 billion with the restructuring costs to the operation. The accounts exclude protection from lawsuits.
THE AKROS REPORT
Banca Akros yesterday highlighted that the issue of causes is a risk "considered a significant obstacle to any type of agreement". With the consequence that without a full shield from the government there would be no marriages with another bank. If Unicredit acquired Mps , for the brokers of Banca Akros it would be able to equalize the difference compared to Intesa Sanpaolo in terms of share of the Italian banking market (approximately 4% in direct deposits and 5% in customer loans) and would offer potential cost synergies estimated at 500 million euros (run-rate), with an effective value of approximately 2.3 billion. “But with significant execution risks,” Akros closes.
WHAT MILANO FINANZA WRITES
Among the conditions set by the ECB to authorize the spin-off, one is difficult to achieve: finding investors willing to subscribe to 30% of the At1 bonds that the bank will have to issue and who do not pay the coupon in the event of losses (Mps admitted that it will be in the red until 2023). Hence – wrote Mf / Milano Finanza – the resoluteness with which the Treasury is investigating, with the advisor Mediobanca, the road to a merger (for which the names of Banco Bpm, Bper, Agricole are also circulating) in order to settle a once and for all the Siena dossier.
THE HYDRA OPERATION
If the Hydra operation were to jump, in fact, Mps's impaired loans would have to deal with the automatic devaluations of the EU calendar provisioning, of which Bastianini also hoped for a postponement "absolutely positive for the system". Only thanks to the demerger, in fact, MPS "would have had a much less impact" than other Italian banks, in a context in which, due to Covid, "it is reasonable to expect a growth in the default rate". Also to address these issues, MPS is working head-on on the new industrial plan that could see the light "in a few weeks, a few months" with the aim of giving the bank "a prospect of development and growth".
Meanwhile Mediobanca on behalf of the Treasury is offering MPS left and right.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/mps-ecco-come-mediobanca-offre-il-monte-a-unicredit-banco-bpm-e-non-solo/ on Wed, 23 Sep 2020 13:30:58 +0000.