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Giorgia Meloni’s government is exploring ways to counter UniCredit’s takeover bid for smaller Italian rival Banco BPM, which has thwarted Rome’s plans to consolidate banks, according to two people accustomed to the plans.
Options include issuing an emergency decree to circumvent the so-called the principle of passivity, which prevents takeover entities from making decisions that might influence the approach to the takeover.
Since UniCredit announced its €10.1 billion offer on Monday, the availability implies that Milan-based BPM is not going to find a way to increase its stake within the state-backed Monte dei Paschi di Siena, which the federal government wants to privatize, for six months. It is also prohibited to change the terms of its own offer to purchase the Italian asset management company Anima price EUR 1.3 billion.
Finance Minister Giancarlo Giorgetti also threatened to use the so-called the federal government’s golden powers to impose conditions on the takeover of BPM by UniCredit. The rarely used powers are intended to block foreign takeovers of strategically essential domestic assets.
“It’s like going back 50 years when the government interferes in national banking transactions or tries to block them if they don’t like them,” said one top Italian banking executive.
The move by UniCredit chief Andrea Orcel threatens to derail Rome’s plans to create a bigger national banking leader by merging MPS with BPM. After weeks of backdoor negotiations, the federal government, which earlier this month sold BPM a 5% stake in MPS as a prelude to further consolidation, can have to return to square one.
In the case of Meloni’s coalition partner, the right-wing nationalist League party, the irritation is deeper. BPM is a vital lender within the party’s northern stronghold, Italy’s richest and most industrialized region. Representatives of the League party also hoped to increase political influence over the enlarged banking group through a merger with MPS, traditionally related to Italian leftist circles.
“We need banks close to our regions,” deputy prime minister and League leader Matteo Salvini said this week.
While Meloni shunned publicly commenting on UniCredit’s offer – and Foreign Minister and member of the center-right Forza Italia party Antonio Tajani said it was not up to politicians to interfere – Salvini expressed his opposition, suggesting that foreign interests were behind Orcel to disrupt the privatization of MPS.
“Look at UniCredit shareholders. . . these are the USA, the French and the Germans, the Italians are marginal. . . so some doubts are justified,” he said.
Orcel is not new to this type of showdown: In 2021, then-Prime Minister Mario Draghi’s government spent months in negotiations with former deal banker UBS, trying to agree a price for MPS.
“Meloni and Giorgetti were sure that UniCredit would not defy the government again, but that’s Orcel. . . good deal makers are those who are not afraid to play with fire, and he is playing with fire,” said an Italian official present at the 2021 talks.
Orcel said this week that the government’s lukewarm response was to be expected and that it was “appropriate by their assessment.”
This is the second time in two months that the banker has angered the EU government. In September, UniCredit’s rapid and unexpected build-up of its stake in Commerzbank, which Berlin has owned because the financial crisis and which it is also trying to privatize, sparked fierce opposition from major political parties and trade unions.
Analysts and politicians have doubts whether UniCredit can successfully conduct two complex takeover bids concurrently. Shares of the Milan-based lender have fallen almost 8% because the Friday before the announcement. The attempt to increase its stake in Commerzbank to 21 percent is awaiting regulatory approval as Germany heads toward early elections in February.
In Italy, BPM’s board rejected UniCredit’s offer, saying it will lead to hundreds of job losses and that it didn’t reflect the bank’s value. “Price is an issue and the fact that the premium is almost zero is peculiar,” said Roberto Freddi, head of European financial services at consultancy Kearney.
“Commercial banking is a boring, highly regulated, pro-government business, you can’t go about it like a gunslinger,” said one other senior banking executive.
