Banco BPM has granted powers to its chief executive officer, Giuseppe Castagna, to initiate formal contacts with Crédit Agricole and study in detail the proposal put forward by the French group to integrate its Italian subsidiary within the transalpine entity.
After reviewing the offer submitted by Crédit Agricole, the board of directors of Banco BPM has decided to launch a series of “exhaustive” analyses in order to determine the viability of the operation, “which could lead to the creation of a leading group in the Italian banking landscape”.
However, the main objection raised by the entity when it comes to moving forward with the transaction is related to the possible loss of its contestability status, that is, the ability to be the subject of a public takeover offer (OPA) in the market.
Having that condition generally helps a company to be perceived more favorably by investors, to be more attractive to minority shareholders, and to have more room to improve its stock market valuation.
“Consequently, it is essential that the board of directors of Banco BPM be able to submit to the general meeting of shareholders a proposal based on valuation criteria that adequately reflect that loss of contestability—as well as the strengths of the Bank’s business model—so as to guarantee the greatest possible support among shareholders,” states the statement issued by Banco BPM.
Crédit Agricole’s initiative involves merging Banco BPM with its Italian subsidiary, in a new move within the banking concentration process in Italy. The French entity has put on the table a 20% premium on the operation, complemented by the distribution of an extraordinary dividend of 1,000 million euros, which would allow it to increase its presence in the capital of Banco BPM from the current 29.6% to 45%.
If it obtains all the necessary authorizations, the deal would be closed in the second half of 2027. Crédit Agricole estimates that the integration will generate cost synergies of 800 million euros per year.