EU calls on Italy to review decree on Unicredit - Banco Bpm. Government: we will respond in a spirit of cooperation

According to Piazza Meda, "in this context of profound uncertainty, BPM's shareholders may have been deprived of an option, the terms of which had been fairly established and, as clearly highlighted by UniCredit at the time of the launch of the Offer, could have already been improved if there had been an orderly Ops process," Unicredit added. "This is why," Unicredit stressed, "the bank will consider all appropriate initiatives in a timely manner.

"The merits of UniCredit's appeal were clearly underlined by the TAR," the bank added, reiterating that it "positively" assessed the administrative court's decision: "Of four prescriptions, in fact, two have been cancelled." According to Unicredit, "this is unequivocal proof that the way in which the Golden Power was used is illegitimate, so much so as to require the issuance of a new decree, since the one adopted on 18 April was annulled by the Court". The ruling itself, moreover, "in itself demonstrates the merits of UniCredit's remarks regarding the uncertainties arising from the Golden Power prescriptions and their application in the case at hand, requiring the Regional Administrative Court to provide almost 100 pages of clarification in this regard". UniCredit 'will now assess all appropriate initiatives in a timely manner,' the note stressed.

The two annulled prescriptions concern "the pre-definition of a ratio between loans and deposits and the maintenance sine die of the level of project financing," Unicredit explained. As far as the prescription concerning Anima is concerned, "it has been clarified and implicitly modified to the extent that the TAR has accepted and formalised the different interpretation of the prescription proposed by the Mef a few days before the first hearing of the Court and then formally presented to the Court as part of the defences carried out". Therefore, 'there is no longer an obligation, and rather a reference is made to a programmatic indication to maintain the Italian securities in Anima, in compliance with the fiduciary duties towards the clients to which such assets belong'. With regard to Banco Bpm's position, "UniCredit will not comment on the specific statements made by Bpm on both the matter and the offer, nor on Bpm's anomalous use of any available initiative to obstruct the offer, regardless of its merit".

Regarding in particular 'the cessation of operations or the sale of Unicredit's assets in Russia (a requirement that does not include payments, as specified by the Mef), the TAR stated that it does not have full jurisdiction in the matter. As stated by the Tar, the competence to assess the matter is the prerogative of the ECB and UniCredit is already complying with the ECB's requests'.

As mentioned, the Lazio Regional Administrative Court partially upheld the appeal with which UniCredit challenged the legitimacy of the golden power exercised by the executive for the Ops on Banco Bpm. There were two specific points of acceptance: the one requiring that "the loans/deposits ratio practised by BancoBpm and UniCredit in Italy should not be reduced for a period of five years, with the aim of increasing loans to domestic households and SMEs", exclusively with reference to the time profile; and the one concerning the maintenance of the level of the project finance portfolio.

On the other hand, no inaccuracy was found in the prescription by which UniCredit was required to 'maintain the current weight of Anima's investments in securities of Italian issuers' (not a binding obligation, but a recommendation) and to 'support the company's development'. The challenge referring to the prescription that required the bank to cease all activities in Russia was also not upheld.

After the decision of the TAR, the position of the executive emerged: according to sources in the Mef, 'the government welcomes the ruling, which largely confirms the legitimacy and therefore the structure of the golden power, particularly in its qualifying points, the obligation for UniCredit to divest its assets in Russia within nine months and the maintenance of Italian securities in Anima'. According to the same sources, 'economic security is thus recognised as an element of national security: a fundamental principle that underlies the golden power in question and will be increasingly important in the future'.

For its part, BancoBpm reported in a note that the institution "takes note of the Lazio Regional Administrative Court ruling recognising the correct actions of the government and, in particular, confirming the substantial legitimacy of the provisions contained" in the Dpcm on golden power. "In light of the aforementioned ruling, Banco Bpm hopes that UniCredit will clarify its intentions with regard to an Ops - which will close on 23 July after more than eight months from the announcement - which, as a result of the passivity rule, has severely limited the Bank's strategic flexibility at a key time for the national credit sector, generating serious uncertainty for shareholders, customers and employees".

Now, after the tar and the European stance, there is expectation for UniCredit's moves, also in the light of Sunday's very harsh communiqué: on several occasions the ceo, Andrea Orcel, declared that in the absence of clarity on golden power the bank would have withdrawn its offer for Piazza Meda: "At the moment," he said a month ago, "the probability is well below 50%". It cannot be ruled out that a board meeting to examine the situation may be called in the near future, in order to assess the impact of the surprise move made on Friday evening by Crédit Agricole: already the leading shareholder in Piazza Meda with 19.8%, the French have asked the European Central Bank for permission to exceed the 20% threshold in order to theoretically reach just under 30%, the limit beyond which the obligation to take over the shares is triggered. UniCredit's bid now faces an unwieldy partner who could potentially hold almost a third of the target bank. Orcel's goal of reaching 66%, and of integrating BancoBpm to fully extract the synergies of the acquisition, should therefore pass through an agreement with the Crédit Agricole, already UniCredit's partner on the asset management front.