UBI Banca Shares Jump After Intesa Takeover Offer
February 18 2020 - 4:29AM
Dow Jones News
By Carlo Martuscelli
Shares of Unione di Banche Italiane S.p.A., or UBI Banca, surged
in trading on Tuesday morning following a surprise offer made by
larger peer Intesa Sanpaolo S.p.A. on Monday night to buy the
Italian lender.
The proposed all-share deal--which values UBI Banca at 5.02
billion euros ($5.44 billion)--would mean shareholders receive 17
Intesa Sanpaolo shares for every 10 UBI Banca shares held.
Intesa plans to delist UBI Banca, which is the fourth-largest
banking group in Italy by number of branches, with a market share
of about 7%.
Shares of UBI Banca at 0844 GMT were up 26% to EUR4.40, while
Intesa Sanpaolo shares traded 1.6% higher at EUR2.58.
Giovanni Razzoli, an analyst at Italian investment bank Equita,
called the offer totally unexpected.
"The strategic rationale of the deal lies in the consolidation
of the domestic market--where Intesa is expected to increase its
market share to 20%," he said.
Financial analysts have previously said that Italy's banking
sector is ripe for consolidation.
Low interest rates have weighed on the bottom lines of lenders
in the fragmented sector. Consolidation could help shore up
profitability,. which efforts to clean up balance sheets through
the reduction of nonperforming loans have simplified the merger
process.
Meanwhile, the European Central Bank has signaled in private
that it is open to potential tie-ups, the Wall Street Journal
reported in January.
Write to Carlo Martuscelli at carlo.martuscelli@wsj.com;
@carlomartu
(END) Dow Jones Newswires
February 18, 2020 04:14 ET (09:14 GMT)
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