UniCredit Wins Partial Support in Legal Battle Over BPM Deal

Mint

a day ago

(Bloomberg) -- An Italian court accepted some of UniCredit SpA's requests to annul conditions imposed on its bid for Banco BPM SpA, handing a partial victory to Chief Executive Officer Andrea Orcel in his plan to create the country's largest lender.
The Administrative Court of Lazio lifted two conditions imposed by Prime Minister Giorgia Meloni's government on the deal, according to a ruling published on Saturday on the court's website.
The prescriptions that will be canceled relate to the Italian government's request to lower the loan-to-deposit ratio at Banco BPM and UniCredit in Italy for five years, and to not reduce the current level of Banco BPM and UniCredit's project finance portfolio in Italy. The court decision can be appealed by the parties.
Spokespersons for UniCredit weren't immediately reachable for a comment and a spokesperson for the Italian government declined to comment.
The ruling is a crucial decision for a landmark deal that has undermined a competing effort by the government to build a new banking group to rival UniCredit and Intesa Sanpaolo SpA. It is only one of several competing bids currently ongoing among Italy's banks.
Even if the outcome is a partial win for UniCredit, it isn't clear if the bank will continue to pursue its bid for Banco BPM. The offer period expires on July 23, and Orcel has warned the deal 'might fall through.'
UniCredit unveiled its unsolicited all-share offer for Banco BPM in November, when it became clear that the Italian government was looking to build a large banking group around the formerly bailed-out Banca Monte dei Paschi di Siena SpA. Banco BPM was seen as a potential candidate to merge with Monte Paschi.
Orcel escalated the standoff with the Italian government in May, when UniCredit said it planned to file a claim with the administrative court over the wide-ranging conditions imposed on a potential deal. The bank said at the time it wanted the court 'to address the reservations existing on the legitimacy' of those restrictions.
In a move that could also affect the endgame over Banco BPM, Credit Agricole SA said Friday it is seeking to further increase its stake in Banco BPM, reinforcing its position as a major shareholder and potentially complicating UniCredit's effort to acquire the Italian lender.
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