BancoBpm, Piazza Meda's three options to react to UniCredit's assault

He's not buying it, Giuseppe Castagna. While he studies possible counter-moves, the CEO of BancoBpm strongly rejects UniCredit's exchange proposal. He does so by signing a letter addressed to employees in which he reiterates the messages contained in the note approved the day before by the bank's board of directors, which unanimously - and on a preliminary basis - rejected UniCredit's proposal, the terms of which are defined as 'unusual'. And precisely because he is speaking to employees, the Neapolitan banker first of all emphasises the risks in terms of employment. The cost synergies deriving from the merger, estimated by UniCredit at around EUR 900 million, cause "great concern" according to Castagna because they represent "more than a third of the cost base" of BancoBpm, a figure that "would mean staff cuts of more than 6,000 colleagues", as stated in the letter published in Sole 24Ore.com.

A threat, this one, that agitates the internal union world at BancoBpm. But which may also become a political issue and a mine in the path of UniCredit CEO Andrea Orcel, if not adequately defused. The issue becomes relevant above all in perspective, because a hypothetical relaunch on the price should be matched by an adjustment of synergies, so that the deal is not dilutive in terms of return. But Castagna highlights a multiplicity of other knots that the offer brings with it. UniCredit's proposal - which values BancoBpm shares at EUR 6.65 against EUR 7 on the market today - does not reflect 'in any way the profitability and further value creation potential for Banco Bpm shareholders'. In short, the valuation of Piazza Gae Aulenti does not take into account the "potential" that has been "further strengthened by the extraordinary operations recently announced", namely the launch of the Opa on Anima and the entry with 5% (destined to rise to 9%) in Mps. BancoBpm, which has "a strong vocation for being close to the territories and SMEs" and a presence in areas that are "among the most dynamic in the country and in the Eurozone", wants to continue to be a "large autonomous bank", and not to "become the subject of operations that do not take into account the value expressed by our bank today and, even more so, in the near future".

It remains to be seen what the possible countermoves might now be from Piazza Meda, which has stressed that it does not want to 'neglect any strategic options' in response to UniCredit's attack. Given the passivity rules, BancoBpm - which has not yet appointed advisors, but is looking to Lazard and Citi - must necessarily go through the shareholders' meeting. Relaunches on Anima or a buyback would not change the scenario much, while the entry of a new major shareholder could act as a brake. The ideal would be to put an offer on the table that would create significant value for shareholders and force UniCredit to consider a relaunch. Yes, but which one?

One hypothesis is to create an axis with the French shareholders of Credit Agricole, themselves shareholders with 9.2% of Piazza Meda.This option seems unfeasible today, given the government's 'sovereignist' posture. This does not rule out the possibility that the French might move in counter-attack, attempting, even if only tactically, a counter-offer. However, the risk for the transalpine bank would be that of seeing its commercial partnership with UniCredit (tightened through Amundi) "emptied" on the asset management front, which could instead be strengthened once it has given its "green light" to UniCredit.

The second hypothesis passes through an alliance with the Unipol-Bper axis. This hypothesis is more theoretical than substantive, given that the Emilians would instead play at waiting for the outcome of the attack launched by UniCredit to then intervene on Mps, at that point creating the desired third pole.