BBVA has received some important setbacks in its legitimate attempt to acquire the italian bank, Banca Nazionale del Lavoro (BNL), with a determined local insurance company, Unipol, allying itself with the President of the Bank of Italy, the regulator, to derail their bid.
Having withdrawn from the process, they are now following up with an aggressive and intelligent three-pronged strategy that should delight their shareholders.
Firstly, they are suing for an increase in the price offered. Their argument is that, as Unipol had paid 2,952 euros per share for a sizeable minority stake just prior to the launch of their official offer, they should be required to offer that price and not the 2,7 euros contained in their official offer. Secondly, with the constant pressure, Unipol could be pushed to withdraw its bid, either because of the pressure to up its bid price and/or because of the difficulty in financing its cash offer. Such withdrawal by Unipol for whatever reason, would open the door to BBVA to renew their own offer for BNL. Thirdly, as a minimum, a push to ensure that the offer on the table is closed and the price not reduced. As they still have not received approval from either their insurance or the banking regulators, Unipol still have an excuse for a reduction in the price, as Unipol´s weak capital position and the related difficulty in funding the offer has been cited as a concern.
While this last option may be the least preferred by BBVA, it will secure them a profit from its Italian venture of over 600 million euros. Not bad as the least preferred option! BBVA´s strategy demonstrates why BNL´s minority shareholders would be far better off if their future was in the hands of professionals such as BBVA management. We await Unipol´s next moves.
Onésimo Alvarez-Moro
See article:
BBVA, Spain's second largest bank, is mounting a legal challenge to Unipol's takeover bid for BNL of Italy, in an attempt to overturn the Italian insurer's €8.3bn ($10bn) offer on technical grounds.
The Spanish bank, which owns 15 per cent of BNL, withdrew its own offer for the bank in July, when Unipol announced it had built a 51 per cent stake in the target bank with the help of international banks and local co-operatives.
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