By Andrea Mandala and Valentina Za
MILAN (Reuters) – Italy’s third-largest Banco BPM on Wednesday stated it will launch a buyout provide to achieve full management of asset supervisor Anima Holding in an as much as 1.6 billion euro ($1.7 billion) deal.
Banco BPM already owns 22% of Anima. The buyout provide, geared toward taking Anima non-public, is contingent on buying no less than 67% of the fund supervisor.
Bringing Anima in home will increase Banco BPM’s charge earnings, serving to it to buttress earnings within the face of declining rates of interest.
The deal is the most recent signal of consolidation within the financial savings administration business, the place competitors is rising, and displays a regulatory profit for asset managers that are purchased by way of a financial institution’s insurance coverage arm.
BNP Paribas (OTC:) earlier this 12 months led the way in which by agreeing to purchase the asset supervisor of French insurer AXA by way of its BNP Paribas Cardif insurance coverage enterprise.
“The deal is smart in our view within the context of accelerating income diversification with a contained core capital hit,” Jefferies analyst Marco Nicolai stated.
Banco BPM stated as soon as it accomplished the transaction, charges and fee will account for greater than 45% of core revenues from 37% at current.
Banco BPM is providing Anima shareholders 6.2 euros a share or an 8% premium to Wednesday’s closing value.
Shares in Anima closed at 5.75 euros on Wednesday, for a year-to-date achieve of 46%.
Anima is 9.8% owned by Italian non-public fairness fund FSI, which is already a accomplice of Banco BPM in funds. FSI invested in Anima in February 2023, in a transfer that was interpreted as a wager on future M&A. The Italian put up workplace Poste Italiane owns one other 12%.
On Wednesday Banco BPM CEO Giuseppe Castagna stated different institutional traders have been welcome to remain in Anima’s capital.
Banco BPM will perform the deal by way of its BPM Vita life insurance coverage unit with a view to coordinating the provide of life insurance coverage and asset administration merchandise to purchasers.
The mix will give Banco BPM complete property from life insurance coverage and asset administration of round 220 billion euros.
In response to BPM Vita, the completion of the deal, beneath the regulatory remedy of the so-called Danish Compromise, is anticipated within the first half of 2025.
Citgroup and Lazard (NYSE:) are monetary advisers to Banco BPM and Banco BPM Vita.
Banco BPM stated the deal would solely price it round 30 foundation factors by way of its core capital ratio, and would increase earnings per share by round 10%, lifting the return on tangible fairness above 17% in 2026 from the present 13.5%.
($1 = 0.9317 euros)
