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On Monday, Deutsche Bank (ETR:DBKGn) analyst Giovanni Razzoli updated the financial outlook for BPER Banca (BPE:IM), increasing the price target to EUR8.40 from the previous EUR7.60, while maintaining a Buy rating on the stock. This adjustment follows a recent meeting with BPER Banca’s CEO, which provided insights into the bank’s strategic moves and challenges, particularly concerning its offer to acquire BPSO.
Razzoli noted that BPER Banca has encountered significant resistance from the board of BPSO, mainly due to fears about losing BPSO’s independence. Despite this, BPER Banca’s management is reportedly committed to its current proposal. The analyst suggested that addressing governance issues might be more effective than changing the offer’s financial terms.
The bank has affirmed its capital position, with a Common Equity Tier 1 (CET1) ratio of over 14%, even if only 35% of the offer is accepted. This scenario is considered a conservative estimate, factoring in market doubts about the potential for synergies and the complexity of the group post-merger. In such a case, integration costs would not be recorded.
On the other hand, if the acceptance rate surpasses 50% but remains under the 67% threshold, BPER Banca may be motivated to pursue a full integration of BPSO through an extraordinary general meeting. This could enhance the visibility of the anticipated revenue and cost synergies resulting from the acquisition.
Razzoli’s report underscores the bank’s commitment to the acquisition process and its potential impact on BPER Banca’s financial metrics. The new price target reflects the analyst’s confidence in the bank’s strategic direction and its ability to navigate the complexities of the proposed transaction.
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