BPM: Agricole board of directors: ‘An appropriate valuation is needed to assess the loss of competitiveness’
Piazza Meda is open to a merger but stresses that the proposed criteria do not take the issue of control into account. Castagna has been tasked with leading the negotiations
Banco BPM is open to the merger proposed by Crédit Agricole, but is prepared to negotiate the valuation criteria set out in the plan, which must take ‘adequate’ account of the loss of Meda’s status as a financial centre.
The statement issued by the bank following the board meeting held on Thursday 12 November is clear on this point: the potential merger between Banco Bpm and Credit Agricole Italia ‘would result in Banco Bpm losing its ability to compete to a substantial extent’, the statement reads, meaning it will be ‘essential’ for the Bank’s board of directors ‘to be able to submit a proposal to the general meeting based on the adoption of valuation criteria that adequately reflect the aforementioned loss of competitiveness as well as the strengths of the Bank’s business model’, so as to be ‘able to secure the widest possible consensus amongst shareholders, including for the purposes of the so-called “whitewash” (exemption from the mandatory takeover bid – ed.), whilst ensuring their investment is adequately valued’.
With this in mind, the board, having taken note of the contents of the letter from Crédit Agricole regarding the integration of the French bank’s Italian operations, resolved ‘to undertake the necessary investigations to assess, in the interests of all the bank’s stakeholders, the feasibility of the potential transaction, which could lead to the creation of a leading group within the banking sector’.
The task has been entrusted to the chief executive, Giuseppe Castagna, who will shortly begin discussions with Crédit Agricole to ascertain whether the prerequisites and conditions for the potential transaction proposed by the French shareholder are in place. Both Chairman Massimo Tononi and CEO Castagna are reported to have emphasised, during the meeting, the need for an appropriate valuation for minority shareholders. It is understood that negotiations with Paris will focus precisely on this issue.
Crédit Agricole has put forward a proposal for an amicable merger between its subsidiary Crédit Agricole Italia (CAI) and BancoBpm, in which it holds a 29.6 per cent stake. Under the plans, the new BancoBpm – after merging with Cai – would remain listed in Milan and would be the centre of gravity of the new entity, with CEO Giuseppe Castagna already confirmed by the French as its leader. The French are proposing a 20 per cent premium ‘on the valuation of BancoBpm for the purposes of the share exchange’. Stock market valuations are irrelevant. Crédit Agricole is proposing “an exchange ratio that reflects a 20 per cent premium” compared with “the price-to-earnings multiple expected for 2027, used to value Crédit Agricole’s contributions”.
