By Valentina Za, Andrea Mandala and Stefano Bernabei
MILAN (Reuters) -Italy’s market watchdog has suspended UniCredit’s bid for smaller rival Banco BPM for another 30 days, saying it was too difficult for BPM investors to make a decision amid disputes over the government’s conditions for a deal.
UniCredit’s swoop on BPM, and a similar hostile bid by Spain’s BBVA for Sabadell, which also faces government opposition in Madrid, have sparked a debate over the role of governments in European banking deals.
While European authorities have urged the bloc’s players to gain scale to counter expanding U.S. rivals, some governments are reluctant to sanction deals that may lead to job losses or excessively distance lenders from local communities.
Three people familiar with the matter told Reuters that UniCredit had been ready to ditch the 14.6 billion-euro ($17 billion) all-share bid had the Consob watchdog decided that extra time was not necessary.
UniCredit CEO Andrea Orcel has repeatedly said he would not pursue the deal without complete clarity on the government conditions.
With Banco BPM valued by the market at 15.4 billion euros, Orcel was loath to add the cash top-up needed for the bid to succeed, and would rather let the offer lapse to possibly submit it again later, the people said.
UniCredit had no immediate comment.
The bank’s board started preliminary discussions over Orcel’s acquisition strategy on Monday, a day ahead of approving quarterly results that UniCredit will present on Wednesday.
UNCERTAINTY
Italy’s second-biggest bank has challenged in court the conditions imposed by Italy on the deal on grounds of national security, saying they would damage the enlarged company.
A court ruling this month axed some of the conditions, but left intact a demand that UniCredit cease operations in Russia, apart from payments handled for Western companies.
The European Commission has also criticised Rome’s interference in the deal, saying this month that it could order the government to forgo the conditions altogether.
Consob said in a document on its website that the uncertainty caused by the court ruling and the Commission’s scrutiny made it too hard for BPM shareholders to take a view on the offer.
The offer had been due to expire on Wednesday, with take-up currently standing at just 0.5%. With the suspension running from July 23 to August 21, the tender is now set to resume on August 22.
With only one day of the tender period left when the offer restarts at the height of Italy’s summer break, UniCredit is expected to seek an extension of up to 15 days, which would be allowed under local regulation.
Consob had already granted UniCredit a 30-day suspension after the government in April set its terms for the bid, which launched soon after.
UniCredit unveiled its offer in November, with Orcel saying the bank could not be sidelined as the sector embarked on long-awaited consolidation.
UniCredit has also expressed an interest in tying up with Germany’s Commerzbank, acquiring a 20% equity stake and a further 9% in derivatives, a move staunchly opposed in Berlin.
($1 = 0.8554 euro)
(Reporting by Valentina Za and Andrea Mandala in Milan; Additional reporting by Stefano Bernabei; Editing by Keith Weir, Mark Potter and Matthew Lewis)
