Unicredit comes out in the open on the Montepaschi match. In the afternoon, the Milanese bank issued a brief note, confirming the rumors circulated yesterday. “Despite the efforts made by both parties, Unicredit and the Ministry of Economy and Finance communicate the interruption of negotiations relating to the potential acquisition of a defined perimeter of Banca Monte dei Paschi di Siena”. A few lines arriving, probably at the request of Consob, a few days before the deadline of 27 October.
Despite the progress made in the last month, the distances between Unicredit and the Treasury have remained wide, especially on the capital chapter. As anticipated in recent days by MF-Milano Finanza, a gap of two billion has emerged between the two counterparties that has been impossible to narrow. If Unicredit has quantified the needs necessary to guarantee the capital neutrality of the operation at over eight billion, via XX Settembre is not available to put on the plate an amount exceeding six billion, also considering the tax discount linked to the transformation of the dta into tax credits. .
The divergence in valuations would be mainly linked to restructuring charges. According to Unicredit, the approximately 7,000 redundancies envisaged in the privatization plan would have a cost above the system average due to the relatively low age of Montepaschi personnel, already subjected to significant restructuring in recent years. Therefore, to encourage exits, slides longer than five and perhaps even seven years initially planned would be needed, with an estimated cost of almost 3.5 billion that Piazza Gae Aulenti does not want to take on. Another element of strong divergence was that relating to the assessment of the perimeter: Unicredit would in fact set the bar in the 1.3 billion area, just over double the expected profit (600 million), a multiple judged by Rome to be too low even in comparison with the market average. “They offered us a deal that we could not accept”, a source close to the negotiation confides to Milanofinanza.it.
At this point, however, it remains difficult to establish whether the interruption of negotiations is temporary or definitive. On the one hand, sources close to the game hypothesize that, however sensational, the move should still be read within the negotiation and may herald a reopening of contacts between Unicredit and the Treasury in the coming days. All the more so since there are no other solutions on the horizon, if not an extension of the nationalization regime that via XX Settembre has so far denied with decision: “There are no and no requests for extension have been forwarded, we see no reason”, he had a source explained to Reuters on Monday 18, confirming the timetable.
If, however, the negotiation was definitely blown, the Treasury would have to quickly find a plan B for Siena. The involvement of other private groups in the privatization process appears to be rising: neither Banco Bpm nor Bper could in fact take on a perimeter comparable to that intended for Unicredit. This is why a stand-alone strategy appears to be the only solution, at least in the medium term. Sources close to via XX Settembre suggest that, in a scenario of this kind, Monte could undergo yet another restructuring after those of the last decade, with the sale of non-performing loans for at least four billion, splitting of legal risks based on plan already defined with Fintecna, staff departures in the order of about 5. 000 units and a capital increase of at least three billion euros. In short, the objective of these actions will have to be to further clean up the bank and make it attractive for new investors, presumably to be identified within 2022. In a market-friendly logic, a top management change could also be arranged, with the arrival in the chair of CEO of professionals appreciated by the Treasury such as the current number one of Amco Marina Natale or the former CEO of Ubi Victor Massiah.
On the political front, one can only record that Palazzo Chigi and Prime Minister Mario Draghi have not so far been unbalanced on the dossier: “I can’t answer, because I don’t know”, said Draghi on Friday 22 at a press conference at the end of the European Council , responding to those who ask him if there will soon be a solution on Mps. However, it has not escaped the market which, as reported by MF-Milano Finanza, in recent days the government has extended the tax discount on dta until June 2022. Perhaps precisely in view of a postponement of the negotiations on the privatization of Monte.
Meanwhile, yesterday in its outlook on Italy, the S&P rating agency dedicated a passage to the events of the Sienese bank, defining the discussions on privatization as “in progress”, but stressing that the deal could require a “significant capital contribution” to the Italian state.
Meanwhile, the concern of the trade unions is growing. «Indiscretions report that the negotiation between the Mef and Unicredit regarding the Monte dei Paschi di Siena would have been blown. We will see if it has jumped or not, just as we will see if there will be a six-month extension, compared to 31 December 2021, for the State’s exit from the capital of Mps, an extension that someone will have to officially ask for and that the European Union and the ECB they will have to agree ”, affirms in a note and the general secretary of Fabi, Lando Maria Sileoni.

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