(Bloomberg) -- Credit Agricole is confronted with a dilemma after UniCredit SpA’s unsolicited takeover bid for Banco BPM SpA, according to KBW analysts.
The Italian lender on Monday unveiled an acquisition bid for the smaller domestic competitor, offering almost no premium over the share price at Friday’s close. France’s Credit Agricole owns a stake of 9.2% in Banco BPM and has a partnership with it in Italy.
UniCredit’s bid for Banco BPM requires Credit Agricole “to act” and leaves it with three options, namely expanding its stake, accepting UniCredit’s offer, or making a counteroffer, the KBW analysts including Thomas Hallett said in a note on Tuesday.
“There is no easy solution, with all options causing an element of share price pressure,” they said. The French lender is “stuck between a rock and a hard place.”
Banco BPM on Tuesday rebuffed UniCredit’s offer, saying the deal terms “do not reflect in any way” its profitability and potential for value creation.
Credit Agricole may have increased its holding in Banco BPM to 19% through equity swaps, newspaper Il Sole 24 Ore reported Tuesday, citing “rumors circulating in trading rooms.” Credit Agricole hasn’t asked regulators for authorization to own more than 10% in Banco BPM, a spokeswoman for the French bank said.
--With assistance from Nicholas Comfort.
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