Carige is flying 15% today at € 0.77 for a market value of 581 million, while Bper leaps by 6.5% to € 1.87 and a capitalization of 2.63 billion. Yesterday evening the board of directors of the Modenese bank, 19% owned by Unipol (the latter under the leadership of CEO Carlo Cimbri), presented a non-binding offer to Fitd to take over 88.3% of Carige, including the share 8.3% of Cassa Centrale Banca. The offer lapses if by Monday 20 December the Interbank Deposit Protection Fund does not grant B for an exclusive period and a binding memorandum of understanding is not signed by the end of the year which provides for the obligation of the parties to sign a definitive acquisition agreement. by January 31, 2022.
The requirements requested by Bper for the operation resemble those advanced months ago by Unicredit to detect a perimeter of Mps. That is the neutrality with respect to the current equity position of the Modenese institute (Cet at 13.7% recorded in September), an improvement in the group’s asset quality that would be created with an Npe ratio of Bper to 5.6% and Carige at 5% and a significant increase in earnings per share starting from 2023.
Bper asked Fitd for a capital payment in Carige, before closing, in order to be able to pay the integration costs, the derisking on the entire Carige portfolio (622 million gross NPE) and any charges deriving from the early termination of some agreements commercial and operational (with Amissima and Creditis, estimated at around 210 million). At the closing, Bper will acquire the 88.3% stake for 1 euro, while it will pay the other shareholders (11.7% of the capital) 0.8 euro (+ 31% compared to yesterday’s closing) for a total of 70 million euro . Kepler Cheuvreux(rating hold, target price 2 euro) sees “a positive logic in the operation”, since there is no important overlap between the networks of the two banks and Bper could “increase its assets by about 15% to over 150 billion euros from the current 134 billion, its earnings per share of over 20% when it becomes operational “after the synergies estimated by analysts at 0.2 billion euros. In this sense, Kepler today raises the target price on Bper by 25% from 2.0 to 2.5 euros. The track record of integration of the Modenese bank after M&A operations is positive, the specialists recall, so the execution risk remains “contained, also taking into account the fact that the CEO of Bper, Piero Montani, was also the CEO of Carige in the period 2013-17 “.
At this point Kepler believes that an agreement with Carige would not exclude an extraordinary operation on Popolare di Sondrio (where Unipol has 9.5%), “making an agreement with Banco Bpm further away”. Kepler stresses that the Fitd will need “significant contributions from Italian banks to recapitalize Carige, of which over 20% from Intesa, 10% from Unicredit, 5% from Banco Bpm, and 4% from Bper itself”.
Fabio Caldato, partner of Olympia Wealth Management, believes that the Genoese bank has received “a credible offer from Bper could see the results of the operation in terms of profits as early as 2023”. The real unknown remains Unicredit for the manager, since “I always thought that the best deal for Orcel was the merger with Banco Bpm, a sort of copy and paste of Intesa-Ubi, but the projects of the second Italian bank seem at the moment still obscure “. The government, headed by Mario Draghi, a person “who knows about banks, is silently guiding the rationalization process and I believe that once this is over, we will see European operations”. SocGen(hold, € 2.1) underlines that the potential benefits of Carige’s prepaid taxes are not included in the transaction and represent an additional benefit. With over 150 billion euros of total post-merger assets, “Bper would reduce the gap with Banco Bpm and another extraordinary transaction, for example du Banca Popolare Sondrio could at that point make up the difference”. This deal, according to the brokers, “represents an early relaunch of banking M&A operations in Italy, potentially putting Banco Bpm and Unicredit under pressure”. KBW(outperform, target price 2.5 euros) recalls that Carige has a “long history of losses, but and under the control of Fitd since 2019, it has a low Npe ratio, while Bper is offering 71 million euros for a perimeter with approximately € 2.0 billion of capital and € 12.4 billion of loans entirely financed by customer deposits “. Mediobanca Securities recalls that with the acquisition, Bper will also take over Banca Cesare Ponti, the historic private bank of Carige, while Arca Sgr, the asset manager of the Modenese bank, will benefit from a broader base. Piazzetta Cuccia analysts calculate 2.1 billion badwill (negative goodwill) and 0.4 billion Dta to be used.
Based on the conditions required for the transaction, today Equita Simassumes the conversion of tax credits, the Dta (a full measure until 31 December of this year, from January 2022 and in reduced form) for 320 million (post tax effect). They estimate that the new group has a solid capital base, a Cet 1 at 14% and an NPE ratio below 5%. They then hypothesize a mid single digit growth in earnings per share by 2023, with a profitability (Rote) that would drop from 7.1% to 6%, while the price / tangible equity ratio would drop from 0.36 to 0.29 times.
From an industrial point of view, the operation, “albeit non-transformative, will allow Bper to reach 10% of the market share in terms of branches from the current 8%), growing especially in Liguria, where Carige has 37% of the branches “, calculates Equita. The move seems “effective, with good timing and creates the conditions for the creation of a third banking center in Italy”. The analysts believe that the conditions set by Bper sterilize the risks of the transaction on the capital and asset quality front, while it will be necessary to verify the actual ability to revitalize the commercial structure of the Ligurian bank and to generate synergies, in the face of a potentially higher risk profile in light of the integration process “.confirms the buy rating and the 2.9 euro target price on Bper. The value incorporates, analysts explain, a base of 2.59 euros per share which accounts for 70%, while the M&A value per hour and 30%, equal to 3.66 euros per share on Bper. Jefferies , holding judgment, 2.3 euros the target price, has a less positive view of the operation. Despite “the interesting evaluation”, he writes, Carige is still a “loss-making bank, having recorded a loss of 77 million euros in the first nine months of 2021”. By annualising this figure, “it means that Bper will have to generate net synergies of at least € 100 million to have earnings per share growth”. Ubs(buy, 2.8 euro), and positive on the deal, nevertheless considers it important to “closely monitor the evolution of the credit risk in Carige’s portfolio”. Buy judgment and target price of € 2.45 also confirmed by Citi . (All rights reserved)

Previous articleInsects, jellyfish, spider fish: here’s what to do in case of stings or bites
Next article5 Incredible Underwater Hotels: The Most Beautiful Under the Sea Hotels in the World