Banco BPM shares slide as UniCredit drops takeover bid over regulatory block

Investing.com -- Banco BPM (BIT:BAMI) shares were down over 2% on Wednesday after UniCredit on Tuesday withdrew its voluntary public exchange offer for all of the bank’s ordinary shares, citing unresolved regulatory barriers tied to Italy’s Golden Power rules.

UniCredit stated that its decision followed the failure to obtain the necessary Golden Power authorization, a condition the bank explicitly declined to waive.

According to the statement, BPM leadership’s insistence on invoking Golden Power provisions prevented UniCredit from engaging directly with BPM shareholders.

The lack of shareholder dialogue hindered the ability to assess the value of the proposed combination or explore acceptable terms.

UniCredit noted progress in discussions with the Regional Administrative Court (TAR), the European Commission’s Directorate-General for Competition, and the Italian government. 

However, it said the timeline for resolving the Golden Power issue extended beyond the offer deadline and even beyond the suspension of the offer announced by CONSOB.

In withdrawing the offer, UniCredit framed the failed process as a setback not only for BPM’s shareholders but also for Italian financial sector consolidation efforts. 

“The UniCredit-Banco BPM tie-would have added massive value for all concerned.  The derailed offer process and continued uncertainty has made this situation untenable,” said UniCredit chairman Pietro Carlo Padoan in a statement.

 Chief executive Andrea Orcel added, “The continued uncertainty around the application of the Golden Power prescriptions do not benefit either,” reinforcing that the withdrawal was aimed at protecting UniCredit’s shareholders.

While the bank reaffirmed its broader support for consolidation in Italy and Europe, it emphasized that mergers and acquisitions remain secondary to its core strategy. 

Orcel said UniCredit’s priority remains executing its ongoing transformation program, which the bank claims is delivering results ahead of expectations.

The offer was initially launched on a non-discriminatory basis, targeting all ordinary shareholders of Banco BPM. BPM’s shares are listed on the Euronext (EPA:ENX) Milan, operated by Borsa Italiana. 

However, legal constraints imposed by the Golden Power provisions limited the offer’s execution. 

These provisions, typically used by the Italian government to protect strategic industries, require prior approval before foreign or domestic entities can acquire significant stakes in certain companies.

UniCredit made clear it would not proceed with the offer without regulatory certainty. 

The bank said it would not pursue similar transactions unless they clearly enhance shareholder value and align with its strategic direction.