MILAN (Reuters) -Italy’s third-largest bank Banco BPM on Thursday formally rejected a takeover bid by bigger rival UniCredit, saying the price was too low and that its shareholders would be penalised in the combined entity.
UniCredit’s 13 billion euro ($14.8 billion) offer starts on Monday and runs until June 23. UniCredit has the right until June 30 to drop the offer.
“We find it really quite awkward that already three of the conditions UniCredit has included in their offer have not been fulfilled,” Banco BPM Chairman Massimo Tononi told a conference call.
“We cannot understand why UniCredit is not making clear what their intentions are: whether or not they intend to waive those conditions … or terminate their offer.”
UniCredit has said it wants to wait until the very end of the offer period before deciding whether to proceed.
Complicating the deal, Italy’s government has set a number of requirements for the bid, which UniCredit says could be harmful and make it impossible to take a final decision.
UniCredit is offering 0.175 new shares for each BPM share. Based on Thursday’s market prices, that represents a 9% discount to BPM’s current market price.
While Banco BPM had already viewed the offer as hostile, its board on Thursday gave the official recommendation to shareholders.
Banco BPM said UniCredit was not offering any premium. The transaction would hand BPM shareholders a 14% stake in the combined entity, below the expected contribution from BPM to 2027 profit of 18%, it added.
After halting two previous takeover attempts, UniCredit in November swooped on Banco BPM, after the latter emerged as a potential merger partner for Monte dei Paschi di Siena.
BPM has long been a natural takeover target for UniCredit thanks to its roots in Italy’s wealthy Lombardy region, where UniCredit’s market share is small for the country’s second-biggest bank.
($1 = 0.8802 euros)
(Reporting by Andrea Mandalà; Editing by Valentina Za and Susan Fenton)
