Unipol runs: analysts say acquisition of Mps assets will generate value

(Il Sole 24 Ore Radiocor) - Unipol continues to run at Piazza Affari. The shares of the Bologna-based insurance company, which had already gained more than 4 per cent on Monday, 8 June, climbed further to EUR 23, an unprecedented level.

"The acquisition of the Mps brand and branches is very advantageous for the insurance company, considering the prospects for business expansion and the price paid, which is entirely sustainable," commented one analyst. Moreover, the group's shares were rewarded immediately: after an initial moment of uncertainty at the opening following the announcement of the transaction on Mps together with Intesa Sanpaolo, they rapidly started to rise, despite the fact that the company is due to launch a EUR 2.5 billion capital increase by the end of the year.

Intermonte has promoted the transaction on Mps, although for the time being it has decided to maintain the target price on the stock at EUR 24.2 and the recommendation at 'Outperform'. According to the sim's experts, the Mps deal agreed with Intesa Sanpaolo "will generate value for Unipol shareholders willing to look beyond the dilution" they will have to deal with in the short term due to the capital increase. Analysts point out that the acquisition of the Mps brand and branches, for a value of between €3bn and €3.5bn, is a good way to deploy the excess capital Unipol has accumulated in recent quarters, ahead of the targets set by the business plan. "The agreement, which was unexpected by the market, offers Unipol the possibility to actually deploy excess capital through the acquisition of a strategic banking asset at reasonable multiples, generating an increase in earnings per share and dividend per share starting from the 2027 financial year", they explained, warning that the only element of uncertainty remains linked to the execution risk of the transaction, the €2.5 billion capital increase and the approval of the merger by Bper shareholders with the acquired Mps assets.

Intermonte also appreciates the fact that Unipol will bring its stake in the new banking aggregate close to 40% - 38.1% to be precise - without the need to launch a takeover bid. At present, on the other hand, its stake in Bper is 19.89%, to which must be added a further 9.74% controlled through derivatives. "We consider the transaction a disciplined use of excess capital, with significant growth potential in the bancassurance business and an expected minimum dividend of EUR 930 million starting in the 2026 financial year," the analysts point out. Dividend that will grow in subsequent years, benefiting from the expected improved profits thanks to the contribution of the banking group and the synergies that will be created.

As for the capital increase, 'in our view it represents the cost necessary to transform the surplus capital into a banking control operation'. But from a financial point of view, the operation appears to be entirely worthwhile, given that with the acquisition of 635 branches, some 2 million customers, 55 billion direct deposits, 42 billion net loans to customers, less than 20 billion risk-weighted assets (Rwa), some EUR 3 billion in Cet1 capital, a Cet1 ratio of 16%, €4 billion in shareholders' equity and an expected net profit of between €400 and €460 million, Unipol will take over "a profitable retail platform, characterised by a solid balance sheet, a substantial capital endowment and the immediate possibility of distributing its insurance offering through the acquired banking network".