By Cristina Roca
Shares in BPER Banca SpA traded sharply higher Wednesday morning after the bank said it submitted a nonbinding offer for smaller rival Banca Carige SpA.
The Modena, Italy-based bank said late Tuesday that it proposes buying 88.3% of Carige's shares for a consideration of one euro ($1.13) from the country's deposit-guarantee fund, FITD, and Cassa Centrale Banca. BPER will pursue a deal that doesn't affect its capital position and significantly boosts its earnings per share starting as early as 2023, the bank said.
BPER would then launch a public purchase offer of EUR0.80 a share for the remaining shares. The EUR0.80 price represents a premium of 29% over Carige's closing price as of Dec. 13, BPER said.
At GMT 0824, shares in BPER traded 7.2% higher at EUR1.88. Shares in Carige jumped 17% to EUR0.78.
Italy has been trying to reprivatize Carige. FITD rescued the troubled lender in 2019 and holds 80% of its shares. Cassa Centrale Banca holds a 8.3% stake.
"The transaction would additionally make it possible to definitively resolve Carige's issues," BPER said.
In its offer, the bank proposed that FITD makes a capital contribution of EUR1 billion to Carige before closing of the deal.
The financial terms of the deal look attractive for BPER, and would help it grow its customer base by around 20%, Citi analysts said.
The offer will lapse if FITD doesn't grant BPER an exclusivity period by Dec. 20, or if the parties don't enter into a binding memorandum of understanding by Dec. 31.
Write to Cristina Roca at email@example.com
(END) Dow Jones Newswires