MPS: Fitch says there are ‘numerous obstacles’ and ‘significant risks’ to the OPs
Negotiations with Agricole over Banco BPM described as ‘difficult’
The bids launched by Mps for Banco Bpm and Banca Generali “add a significant risk of execution”. This is highlighted by Fitch, which notes that the OPs ‘face numerous obstacles’ at a time when Mps ‘has yet to integrate Mediobanca’.
According to the rating agency, however, it is ‘too early to fully assess the implications for MPS’s ratings’, as the bank is under review with a positive outlook in light of Intesa Sanpaolo’s public takeover bid.
According to a report, MPS’s credit profile ‘could come under pressure if enforcement risks were to materialise or if the CET 1 ratio were to fall below 13 per cent with no prospect of recovery in the short term’. The document acknowledges, however, that ‘in the long term, the successful integration of Mediobanca, Banco BPM and Banca Generali could benefit MPS’s business profile and profitability through synergies and the management of the risk profile of the new merged institution’.
Fitch describes the two OPAs as “a defensive move to fend off” Intesa’s takeover bid and points out the need for approval by two-thirds of the shareholders’ meeting in a governance context “that does not appear cohesive given the majority vote on 20 August” by the board of directors. In any case, “success will depend” on the ability to convince “the shareholders of Banco Bpm and Banca Generali”. And on this front, ‘discussions with Banco Bpm’s largest shareholder, Crédit Agricole, remain difficult, given the recent failure of talks regarding a merger between Banco Bpm and MPS’.
