Business
Credit Agricole tells Rome it plans to raise its Banco BPM stake to near 30%, sources say
Credit Agricole tells Rome it plans to raise its Banco BPM stake to near 30%, sources say
About this update from Banco Bpm Spa
By Giuseppe Fonte, Valentina Za, Andrea Mandala and Elvira PollinaFrance's Credit Agricole EURONEXT:ACA has informed the Italian government it plans to increase its stake in Banco BPM MIL:BAMI to near 30%, sources said, bolstering its grip on the country's fourth biggest bank amid a fresh merger wave in the sector.Credit Agricole told Rome officials it had entered derivative contracts to reach a 29.9% BPM stake from 22.9%, but ruled out a full takeover, two sources briefed on the discussions told Reuters, asking not to be named.The Paris-based bank and BPM both declined to comment.Credit Agricole's move comes after Italy's market leader Intesa Sanpaolo MILSEDEX:I05808 this month made a €30.6 billion ($35 billion) unsolicited cash-and-share bid to buy Monte dei Paschi di Siena (MPS) MIL:BMPS - just as Banco BPM invited bailed-out MPS to open merger talks.Intesa's bid has triggered a new round of M&A activity in Italian banking following a first consolidation wave last year, and Credit Agricole is strengthening its hand against fresh takeover interest for BPM, according to the sources.UNICREDIT READY FOR POTENTIAL NEW BPM MOVE?UniCredit MIL:UCG, currently busy in Germany with a bid for Commerzbank XETR:CBK, could again turn its sights on BPM, a scenario Credit Agricole is bracing for, bankers said.A spokesperson for UniCredit referred to comments earlier this week by CEO Andrea Orcel who said his bank was enjoying being "an observer" for once in Italian consolidation, with "rumoured" targets trading at a 30-35% valuation premium.However, UniCredit stands ready to seize any opportunities, he added.Without a deal in Italy, the Commerzbank acquisition will turn Germany into UniCredit's main market.Short of challenging Intesa's bid for MPS, BPM is the only remaining possible domestic target for UniCredit.Italy is Credit Agricole's biggest foreign market. The French bank has grown slowly in the country for decades, keeping the government on its side by avoiding any aggressive moves.Through its representatives on BPM's board, Credit Agricole backed the bank's proposal to table merger talks with MPS.However, a third source familiar with the French lender's thinking said it would not support a BPM countermove to challenge Intesa's bid.MPS has said it will assess both Intesa's bid and BPM's proposal, but Intesa's plan has backing from key elements in Italy's ruling...