Unicredit will only eat Mps’s succulent stews (with tax aid)
All the terms of the agreement between Unicredit and the Draghi government to acquire the good part (without Npl) of Monte dei Paschi di Siena (Mps), the conditions of the agreement, the words of Orcel, the effects for Unicredit and the abstention in Board of Directors of Padoan, former Treasury Minister who had managed the intervention in MPS
Mps? Deal done, announces Unicredit. But no ciofeche del Monte.
Orcel's conditions have been accepted: no NPLs (they should go to Amco), no lawsuits related to the 2011-2014-2015 increases, no impact on capital, thanks to the 2.2 billion Treasury dowry and perhaps even a future capital increase.
“All the bank's npls will be left behind. The bank will arrive with zero NPLs ”, said the CEO of Unicredit Andrea Orcel about Mps. "Legal risks will also be left behind," he added on a conference call.
“We want to reach a conclusion, positive or negative, as soon as possible. Let's hope for mid-September »: these are the times dictated by Orcel to eat the good stews of Monte dei Paschi di Siena.
Here are numbers, details, scenarios and curiosities.
ALL THE DETAILS ABOUT THE UNICREDIT-MPS AGREEMENT
The agreement between the Draghi government and UniCredit 'on certain requirements, namely neutrality in terms of capital, a significant increase in earnings per share, protection from legal disputes and the exclusion of non-performing loans from any transaction, relative to the potential the acquisition of any Banca Monte dei Paschi di Siena business constituted the basis for us to enter an exclusive period of due diligence and negotiation '. This is what the CEO of UniCredit, Andrea Orcel, explained to the financial community, talking about the operation of a possible 'marriage' between the institute in Piazza Gae Aulenti with Mps.
THE UNICREDIT NOTE
Unicredit and the Ministry of Economy and Finance, majority shareholder of Banca Monte dei Paschi di Siena, "approved the conditions for a potential transaction involving the commercial activities of Mps, through the definition of a selected perimeter and adequate risk mitigation measures ". This is what a note from the bank announces, after the advances of the Sole 24 Ore. To this end, the note continues, the parties "will initiate exclusive discussions to verify the feasibility of the operation".
THE EFFECTS OF THE UNICREDIT-MPS OPERATION
A potential transaction "would allow the group to accelerate organic growth plans and facilitate the achievement of sustainable returns above the cost of capital": Mps "could contribute, subject to the definition of the perimeter of the transaction, about 3.9 million customers, 80 billion euro of customer loans, 87 billion euro of customer deposits, 62 billion of assets under management and 42 billion of assets under administration.
HERE ARE THE CONDITIONS AGREED WITH THE TREASURE
The main assumptions agreed with the Ministry of Finance to verify the feasibility of the operation at the equity and economic level by Unicredit are "the neutrality of the same with respect to the capital position of the group on a pro forma basis", "an increase significant of the earnings per share after having considered the possible net synergies of the transaction and in any case the maintenance of the current levels of earnings per share even before taking into account the possible synergies up to 2023 ". These are the first two assumptions indicated by Unicredit which will negotiate exclusively with the Mef the acquisition of a perimeter of activity of Monte dei Paschi di Siena. The other conditions concern disputes, impaired loans and personnel. In particular, Unicredit asks for "the exclusion of extraordinary disputes not relating to ordinary banking activities and all related legal risks, current or potential", "the exclusion of impaired loans and adequate coverage of any further risks credit cards that are also identified following due diligence through procedures to be defined ".
HOW THE STAFF WILL BE MANAGED
Furthermore, among the prerequisites there is an "agreement on personnel management according to the compendium inherent in the exercise of commercial activities, in order to ensure an easy, rapid and effective integration of the business into the group". The transaction under study – continues the note – "will be subject to the positive outcome of the verification of the existence of the essential conditions of the transaction, of the legal, equity, fiscal, accounting and industrial due diligence, and of the discussions with the Mef and Mps aimed at to arrive at a more precise definition of the structure, terms and perimeter of the transaction, as well as the subsequent definition of the related binding agreements ".
PADOAN'S ABSTENTION
Today's resolution of the board on the Mps operation, the note specifies, was approved with the abstention of the chairman Pier Carlo Padoan who, "despite the absence of any conflict of interest and in full independence of judgment", decided to take this position “due to his previous post as Minister of the Economy and Finance”. UniCredit, which following this announcement, will agree with Mps access to the virtual data room dedicated to the performance of the due diligence, "will provide further updates on the potential transaction in compliance with the applicable provisions on market disclosure" .
THE EFFECTS OF MPS FOR UNICREDIT
The Mps transaction – reads the note – would allow the Unicredit Group "to strengthen its competitive positioning in Italy and in particular in the Center-North, where 77% of Mps branches are located, contributing among other things to a growth in market share in Tuscany by 17 percentage points, in Lombardy and Emilia Romagna by 4 percentage points and in Veneto by 8 percentage points ”. This is what has been indicated by Unicredit which will deal exclusively with the Mef on the possible purchase of Monte dei Paschi assets. The transaction – it is emphasized – “would also lead to a significant increase in prospective profitability, while preserving the capital position and improving the quality of the assets and the risk profile of the group on a pro forma basis. Any potential operation would take place within the group's existing focus on the release of internal value which remains and will remain a priority ”.
THE WORDS OF ORCEL
“Unleashing the enormous value that UniCredit holds within it continues to be our priority. However, I have always been clear on the role that M&A could play as a potential accelerator to improve our strategic results, while fully respecting the interests of our shareholders. ' This is what the CEO of UniCredit, Andrea Orcel , explained to the financial community, speaking of the operation of a possible 'marriage' between the institute in Piazza Gae Aulenti with Mps.
STATE SHAREHOLDER?
"It is too early to say, we must first see what the structure of the operation will be". Thus, the CEO of UniCredit, Andrea Orcel, explaining to the financial community the requirements of a possible merger with MPS, replied to those who asked him if the State could be part of the future shareholder structure of the post-merger entity.
THE FISCAL AID FOR THE ASSETS
Finally, not mentioned but now law with the Sostegni bis decree, the aid of 2.9 billion euros in assets that Unicredit would obtain by integrating Mps by 2022, transforming deferred tax assets (the "Dta") into tax credits. . In short, the August negotiations will have to plan on a public "dowry" sufficient for Unicredit.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/unicredit-si-pappera-solo-gli-spezzatini-succulenti-di-mps/ on Fri, 30 Jul 2021 04:30:49 +0000.