June 30, 2020 / 6:36 AM / 15 days ago

Factbox: Intesa bids to shake up Italy bank landscape with UBI offer

MILAN (Reuters) - Italy’s second-largest bank Intesa Sanpaolo (ISP.MI) is pushing ahead with a bid for smaller rival UBI Banca (UBI.MI) despite resistance from UBI’s board, which will formally express an opinion this week, and some of its smaller investors.

FILE PHOTO: The Intesa Sanpaolo logo is seen in Milan, Italy, January 18, 2016. REUTERS/Stefano Rellandini/File Photo

Intesa’s exchange offer for UBI will run from July 6 to July 28, barring an extension.

Following are key details of the deal:

* Intesa is offering 1.7 newly issued shares for each UBI share, valuing UBI at 3.3 billion euros ($3.7 billion) as of June 29, down from 4.9 billion euros when the bid was unveiled on Feb. 17. At that time it offered a 23.7% premium versus UBI’s closing price, excluding dividend payments.

* Intesa, which is set to add around 3 million clients with the deal, is targeting profit of at least 5 billion euros for the proposed combined group in 2022, after the impact of the coronavirus pandemic forced it to cut its initial goal of more than 6 billion euros.

* Under a four-year plan presented in 2018, Intesa had a 2021 stand-alone profit goal of 6 billion euros. UBI is targeting a 665 million euro net profit in 2022 under a business plan released on Feb. 17, only hours before Intesa’s offer.

* The bid, which is conditional on approval from Italy’s antitrust authority, requires acceptance from shareholders representing at least 50% of UBI’s capital plus one share.

* An acceptance of 66.67% would be necessary to guarantee Intesa control of resolutions at extraordinary shareholder meetings regardless of attendance.

* Intesa intends to pay out as dividends of 75% of the 2020 profit and 70% of the 2021 result if the deal succeeds, in line with its business plan targets which it reverted to due to the coronavirus crisis. In the offer it switched to a cash dividend goal of 0.2 euros/share in 2020, rising above that in 2021.

* Intesa forecasts around 700 million euros in pre-tax annual synergies from 2024 if it is able to incorporate UBI, and 611 million euros if it fails to.

* Intesa has committed to selling 532 branches of the combined group, including 31 of its own branches, to BPER Banca (EMII.MI) to gain antitrust approval. If the regulator deems that insufficient, Intesa will sell another 17 UBI branches within nine months.

* Intesa will cover gross integration costs of 1.3 billion euros in 2020 with the negative goodwill arising from a purchase price below the target’s book value, which totalled 3.4 billion euros as of June 15 taking into account the BPER deal. Intesa will use another gross 1.8 billion euros to raise UBI’s loan loss provisions and sell 4 billion euros in impaired debts.

($1 = 0.8864 euros)

Compiled by Valentina Za and Andrea Mandala; Editing by Alexander Smith

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