Italian banking group Unione di Banche Italiane (UBI Banca) has rejected a revised takeover bid of €4.82 per share from its larger rival Intesa Sanpaolo (ISP).
The board of UBI Banca after considering the revised proposal said that in spite of the cash component introduced in the offer, it does not fully recognise the total value of the bank.
This is the second time that the Italian banking group had rejected Intesa Sanpaolo’s offer. The previous offer was €4.25 per share made in February 2020, which was turned down earlier this month on grounds that the price is too low and the terms of it being not being in the interest of its shareholders and employees.
As per the earlier offer, Intesa Sanpaolo offered to issue 1.7 of its shares in exchange for each of the UBI Banca’s shares tendered.
In its second attempt, Intesa Sanpaolo offered the same share exchange ratio along with a cash consideration of €0.57 per share, valuing UBI Banca at €4.2bn, reported Reuters.
UBI Banca’s board, while rejecting the revised offer, said: “The Increased Consideration expresses a valuation of UBI Banca that still does not reflect its real value and does not recognise to UBI Banca’s Shareholders: (i) the contribution made to the overall value of the combined entity; and (ii) an adequate value of the synergies envisaged by ISP.”
The board further said that the offer still puts the majority of the risks related to the achievement of the strategic objectives of the transaction set by Intesa Sanpaolo on UBI Banca’s shareholders. It added that the sweetened consideration does not remunerate the risks adequately, thereby giving scope to an allocation of value and synergies that are unfavourable to UBI Banca’s Shareholders, considering that the component of Intesa Sanpaolo’s is the same as the earlier offer.
UBI Banca’s board also cited that as per the Italian antitrust body, if Intesa Sanpaolo fails in offloading some of the branches owned by UBI Banca for addressing competition concerns, then it may have to sell its own branches. This scenario would put the objectives of taking up the transaction at risk, said the board.
