MPS and ISS oppose the OPA offers for BPM and Banca Generali and the 4 billion maxi-dividend
The proxy adviser recommends voting against the two offers launched by Siena, but says “yes” to the MPS-Mediobanca merger
No to the acquisition of Banco BPM and Banca Generali and to the 4 billion bonus payment; yes to the merger with Mediobanca. Following in the footsteps of MPS’s major shareholders, ISS has also come out against the plan devised by CEO Luigi Lovaglio to fend off Intesa Sanpaolo’s takeover bid, endorsing only the proposal to integrate Mediobanca. The proxy adviser – effectively one of the two major ‘advisers’ to investors alongside Glass Lewis, and as such capable of influencing the voting behaviour of institutional investors – has set out its position ahead of the shareholders’ meeting in Siena on 29 October.
And the verdict is clear-cut. In particular, the vote is against items 3, 4 and 5 on the agenda, namely the key points against which Intesa Sanpaolo itself has taken a stand; it is no coincidence that it has made the adjustment to the cash component of its offer – increasing it by 800 million – conditional upon the MPS shareholders’ meeting rejecting precisely those points.
And it is this very rejection that ISS is now recommending to institutional investors, who are due to meet in Siena at the end of the month to vote on Lovaglio’s proposal. The proxy adviser recommends a ‘vote against’ first and foremost on the proposed acquisition of Banco Bpm. On this issue, ISS highlights ‘significant execution risks’, whilst the integration of Mediobanca is ‘still ongoing’. A particular concern for the proxy advisor is the lack of a prior agreement with Crédit Agricole, Banco Bpm’s largest shareholder with almost 30 per cent of the share capital, which has already spoken out against the merger with Siena.
The “recommendation” to vote against also applies to the bid for Banca Generali. Regarding the proposed merger, the proxy analysts acknowledge that the deal could strengthen the wealth management business, but note that “the risk of integration is a greater concern at this stage”. Furthermore, as in the case of Banco Bpm, without an agreement with the controlling shareholder – namely Generali, which holds 50.2 per cent of the share capital – “it could be difficult to secure the cooperation” necessary for the bid’s success.
On point 5 as well – the one concerning the capital reduction and the simultaneous distribution of a 4 billion coupon to be realised through the sale of a stake held by Mediobanca in Leone – ISS says “no”. Such a scenario ‘would render Intesa’s offer ineffective, thereby eliminating a strategic option currently available to shareholders without offering a commensurate benefit’.
