MILANO – A solo plan to be defined quickly, after having asked the EU for an extension to postpone the agreed privatization for at least six months. And a new partner to be found in the medium term. The wedding between Unicredit (follow the title live) and Monte dei Paschi (follow the title live) will not take place: the interruption of the negotiations was in the air and was made official over the weekend, also by the Treasury which 64% of Siena and for the community commitment must return to privatize the bank by the end of the year. Now a mission impossible.
At the reopening of trading, the securities of both institutions suffer particularly: Mps in particular, which also passes through suspension, and Unicredit, on the other hand, holds a little better.
“Negotiations on MPS were interrupted despite the commitment of the two parties”
by Andrea Greco
The operation (or rather the breakdown of the operation) is followed by the investment banks, whose reports focus on evaluating and the pros and cons. Suggesting the idea that between the two promises to move, a third party (Banco Bpm) that has so far explicitly called itself out of the game as not interested can be the most enjoyable of a newfound speculative appeal. Bper also lights up in Piazza Affari for the speculative appeal.
In a note dedicated to the affair, Citi analysts write before the opening of the markets that some investors may have included some potential from the transaction with Monte dei Paschi in the evaluations of Unicredit, and this could generate a form of disappointment. But the belief of the US bank analysts is that there is a strong potential for price realignment, based on the refocusing of the group’s strategy on Italy, on the expected improvement in terms of the ability to generate profits.
As for the next steps, the American investment bank believes that the most probable scenario is the extension of the term (expected at the end of the year) agreed with the European Union to sell the public share of 64%, through the definition of a standalone strategy (that is, one that relies only on the forces of Monte) while looking for a new partner in the medium term. Also for Morgan Stanley, the failure of the transaction with Unicredit “means that Italy will have to seek an extension” from the EU “for the sale of MPS” and that the Sienese institute “adopts measures to address its problems and that is the risks legal, capital and high costs “going” ahead with the 2-2.5 billion euro capital increase “. For Morgan Stanley there is the possibility that on the Unicredit market it will pay something so that some of the merger synergies already anticipated must be “separated from the current” Unicredit “evaluations but at the same time if the operation does not go ahead with Mps, the prospect of a combination with Banco Bpm resurfaces, offering similar, if not greater benefits. ” Overall, analysts expect the outcome of the negotiations to have a “negative” effect on the Stock Exchange for Mps, “slightly negative” for Unicredit and “positive” for Banco Bpm.
Waiting for the pieces of the puzzle to be composed, therefore, also according to Citi, the expected consolidation of the Italian banking system will return to put the spotlight on Banco Bpm, which has denied the interest in Siena or the hypothesis of meetings at the Mef as Unicredit mail was cooling down, but for Citi it could be interesting as a third aggregator or potential target.
In view of a precautionary recapitalization of Monte, those who pay the price are above all the subscribers of the four subordinated bonds issued by Mps, for a total value of 1.75 billion euros. The securities sell between 13% and 19.4% on fears of a burden sharing in the event that Monte, in the absence of investors willing to subscribe to the increase with the State, should be secured with a precautionary recapitalization and not at market conditions. The 750 million bond expiring in 2028 loses 16.8% and trades just over 60% of its nominal value, the 300 million bond expiring in 2029 falls by 13% to 84.5, the 400 million one expiring in 2030 collapses by 19.4% to 63.4 and that from 300 million with maturity in 2030 by 18.9% to 66.
The president of Confindustria also spoke on the Mps dossier: “It is a topic that must be addressed – said Carlo Bonomi – I believe
that can be tackled by thinking of a third banking hub. I understand the needs of the Mef which must resolve the MPS situation – he added speaking on the sidelines of the Industrial Union of Turin – in this I hope that there will be a great discussion at national level for a third pole, also because in dealing with the NRP private investments will be the most important part. In my opinion, having three very important banking centers could also be useful for the business system “.
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