MILAN (Reuters) -France’s Credit Agricole has become the single largest investor in Banco BPM after buying a 9.2% stake, raising the prospect of a full takeover bid and sending shares in Italy’s third-largest lender sharply higher.
Italy is the main foreign market for the French group, which has played an active role in the country’s banking consolidation.
While Credit Agricole said it had not sought supervisory approval to go above 10%, analysts pointed to the gradual stakebuilding that preceded its $1 billion takeover of regional Italian lender Credito Valtellinese in 2021.
“We believe this is the first step that will bring the French peer to get, sooner or later, the control of Banco BPM,” broker Bestinver said in a note.
Credit Agricole had no immediate comment.
Banco BPM has long been searching for a merger partner, with CEO Giuseppe Castagna seen as keen for his bank not to be swallowed by a bigger rival.
Banco BPM’s 200 billion euros ($217 billion) in assets at end-2021 compare with Credit Agricole Italy’s 116 billion euros. The two explored a tie-up in 2020 but talks were fruitless.
A strong presence in Italy’s wealthy Lombardy region had made Banco BPM an attractive target for bigger rival UniCredit, which had readied a takeover offer before Russia’s invasion of Ukraine, sources had told Reuters.
After losing nearly a fifth of its value since the start of the conflict, Banco BPM has a market capitalisation of just over 4 billion euros, giving the Credit Agricole stake a value of around 380 million euros.
Shares in Banco BPM rose 14% by 0931 GMT. Credit Agricole gained 1%.
The French lender said the investment, carried out by buying shares on the market and through a transaction with a leading international bank, would have negligible impact on its core capital ratio.
Already tied to Banco BPM by a long-standing consumer finance joint venture, Credit Agricole said the deal strengthened what it called the two banks’ “solid relationship”, adding it aimed to expand the scope of their strategic partnerships.
It also shows its appreciation of Banco BPM’s “solid franchise”, good financial prospects and “strong and performing management team”, it said.
Credit Agricole’s Italian business dates back to 2007. Ten years later it took over three small failing banks for 130 million euros, while in 2016 its asset manager Amundi bought Pioneer Investments from UniCredit for 3.6 billion euros.
In recent months it considered a bid for ailing Genoa-based lender Carige, which was snapped up by mid-tier rival BPER Banca.
Banco BPM said the stake purchase had not been previously agreed between the two banks.
“The quality and importance of the investor, as well as the appreciation it expressed for our bank … represent a clear acknowledgement of the value and potential of Banco BPM,” the Italian bank said.
($1 = 0.9202 euros)
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