Credit Agricole Bid for Credito Valtellinese Faces Shareholder Resistance
By Mauro Orru
Credit Agricole SA's recently launched bid for its Italian
subsidiary to take over Credito Valtellinese SpA is facing
resistance from some Credito Valtellinese shareholders, amid
concerns the current offer undervalues the Italian bank.
Petrus Advisers Ltd., shareholders of Credito Valtellinese, said
Wednesday in a letter addressed to the board of directors and chief
executive of the Italian bank that it wouldn't tender its shares as
Credit Agricole Italia SpA's current offer of EUR10.50 a share is
"After conducting a range of different valuation scenarios, we
believe that the offer of EUR10.50 per share is inadequate, as it
is opportunistic in nature and significantly undervalues Credito
Valtellinese," Petrus Advisers said in the letter.
The London-based investment firm said it estimates the fair
value of Credito Valtellinese on a standalone basis to be in excess
of EUR14.00 a share and called on the board to appoint financial
advisers for a "careful review of all strategic alternatives,
including the unsolicited offer from Credit Agricole among
Credit Agricole launched its offer on Monday for an investment
of EUR737 million, a 21.4% premium to Credito Valtellinese's spot
price as of Nov. 20.
Petrus Advisers said such a premium is much lower than the
average premium of about 25%-35% for comparable M&A
transactions in Italy, also warning the current offer granted
disproportionate benefits to Credit Agricole.
Credit Agricole said Monday that it expected the deal to be
accretive to its earnings per share by 2022, while the preliminary
estimated negative impact on its common equity tier 1 ratio is
projected to remain below 20 basis points on completion.
The French bank also said Credit Agricole Italia would submit
the tender offer document to Italian market regulator Consob by the
first two weeks of December 2020, with settlement slated for May
Write to Mauro Orru at email@example.com; @MauroOrru94
(END) Dow Jones Newswires
November 26, 2020 05:00 ET (10:00 GMT)
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