Banco BPM in the spotlight amid speculation about a bid for BFF and the MPS case

(Il Sole 24 Ore Radiocor) - Banco Bpm under scrutiny on the Milan Stock Exchange amid rumours of a possible deal involving Bff Bank and speculation of a merger with Banca Monte Paschi Siena .

Following the marriage proposal made in Siena, the shares of the bank based in Piazza Meda have risen by over 15 per cent, recording a series of consecutive gains. In fact, on Sunday 7 June, the bank presented Rocca Salimbeni with a merger proposal yet to be finalised and assessed jointly, limiting itself to setting out in writing, in a press release, its intention to proceed with a ‘merger of equals’ and to safeguard their respective ties to their local areas, as well as the headquarters of the two banks. The proposal contained no financial details, so much so that it was described by Carlo Cimbri, chairman of Unipol, as a “love letter”. However, the initiative quickly took a back seat following the announcement, on Monday 8 June, of the public exchange offer launched by Intesa Sanpaolo for MPS, in agreement with Unipol, which, according to the plan, would take over the Siena-based bank’s brand and 635 branches.

On the eve of the meeting, Banco BPM’s board of directors convened for a session lasting over five hours, during which they addressed issues that had been on the agenda for some time, as well as the new scenarios emerging as the banking sector undergoes consolidation. At the end of the meeting, the directors maintained the utmost discretion, but word from Piazza Meda suggests a cautiously wait-and-see stance regarding the response from Rocca Salimbeni, which is being called upon to choose between the options on the table and, if necessary, to enter into discussions with Banco Bpm. The chief executive, Giuseppe Castagna, as he has already stated in recent days, does not appear willing to throw in the towel, even though he is facing a particularly strong bid for MPS from Intesa. “I’m still fighting, having withstood an attack last year from a major Italian bank, which we repelled with great pride,” he said during a sporting event, adding that it is necessary “not to give up, to keep giving our best and to try to do everything possible. We will try to do our bit.”

Apart from the MPS case, according to rumours, the bank based in Piazza Meda is reportedly working with Amco on a proposal to be submitted to BFF , which would involve a division of activities: Amco would take over the factoring business, whilst the bank would assume the custodian banking activities and payment services.

Analysts at Equita have confirmed their ‘Hold’ recommendation on Banco Bpm, with a target price of 15 euros, and their ‘Reduce’ recommendation on BFF, with a target price of 2 euros. The experts say they do not expect any surprises from the minutes of the Bank of Italia’s Supervisory Board, following the conclusion of the inspection a few weeks ago. However, they urge caution, emphasising that greater clarity will only emerge following the Bank of Italia’s response to BFF’s capital conservation plan – which forecasts a shortfall in 2028 in the absence of extraordinary measures – and after the completion of the potential securitisation on which management is currently working. As regards Banco BPM, “the impact on capital of any potential transaction will depend on the terms of the agreement and the valuations assigned to the individual business lines”, they concluded.