July 20, 2020 / 12:30 PM / in 25 days

Italian bank shares surge as Intesa bid fuels merger expectations

MILAN (Reuters) - Shares in Italian banks surged on Monday on expectations of more mergers after Intesa Sanpaolo (ISP.MI) sweetened its bid last week for UBI Banca (UBI.MI), which is still resisting the offer.

FILE PHOTO: Intesa San Paolo bank headquaters is seen in Turin, Italy, November 7, 2018. REUTERS/Stefano Rellandini/File Photo

UBI stock was up 13% by 1115 GMT, as shareholders holding 18% of the bank said they would accept Intesa’s revised offer that valued its smaller rival at 4.2 billion euros ($4.8 billion).

Shares in state-controlled Banca Monte dei Paschi di Siena (BMPS.MI) were also up, after it said last week it had appointed Mediobanca (MDBI.MI) to advise on its strategic options.

Shares in Banco BPM (BAMI.MI), which Reuters reported last month was a possible merger partner with Monte dei Paschi, climbed 6.3%. The Treasury is set to sell its stake in Monte Paschi.

Intesa’s decision to improve terms of its all-share offer for UBI with a 0.57 euro per share cash sweetener, announced after markets closed on Friday, added to expectations that the deal to create the euro zone’s seventh-largest bank would succeed.

The government has long pushed for consolidation in Italy’s fragmented banking sector but mergers have run into obstacles, such as a reluctance by smaller banks, which often have a strong regional base, to give up their independence.

Rome daily Il Messaggero reported at the weekend that UniCredit could be interested in a tie up. It said the bank’s Chief Executive Jean Pierre Mustier had met the head of Banco BPM, Giuseppe Castagna.

But Mustier told Swiss newspaper Finanz und Wirtschaft newspaper that Unicredit, whose shares were down 0.3%, had no interest in mergers and would focus on other changes, such as boosting remote banking services.

UniCredit declined to comment. A spokeswoman for Banco BPM said the bank’s top management had reiterated the bank favoured a standalone strategy.

(This story corrects paragraph 3, 4 to show state to sell stake in Monte Paschi, not Banco BPM)

Reporting by Andrea Mandalà and Gianluca Semeraro; Writing by James Mackenzie; Editing by Edmund Blair

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below