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FOCUS-UniCredit’s Orcel was plotting bid before Banco BPM forced hand, sources say

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UniCredit CEO Andrea Orcel had been planning a takeover of Banco BPM for years but was forced to rush a bid due to BPM's own M&A moves. Orcel's dealmaking reputation is now on the line as BPM's shares surged following its announcement of bids for Anima Holding and acquiring a stake in Monte dei Paschi di Siena (MPS), raising the possibility of a BPM-MPS tie-up. Orcel had long desired BPM's position in Lombardy, but had hesitated due to the premium in its shares. UniCredit's bid, offering a 15% premium, has been deemed undervalued by BPM, leading to a price demand increase from the market. Orcel indicated the possibility of offering cash to BPM shareholders and engaging with 'industrial' investors, starting with Credit Agricole. However, Italian conservative government members oppose Orcel's proposal as it derails plans for a BPM-MPS merger, which could create a strong rival to UniCredit and Intesa Sanpaolo. Credit Agricole, the largest shareholder of BPM, has strengthened its position and has informal approval from the Italian government. UniCredit's spokesperson cautioned BPM investors against Credit Agricole's strategy in Italy and a BPM-MPS merger, and BPM is examining its options within the limits of Italian takeover rules. Orcel has approximately €6.5 billion in excess cash and can present various options to convince BPM shareholders that merging with UniCredit is in their best interest. However, time constraints and possible delays in securing investment screening approvals by the government could work against UniCredit.