Shares in Italy’s Banco BPM halted as Unicredit bid talk rekindled

Shares in Italy’s Banco BPM failed to trade at the start of business on Friday as renewed speculation Unicredit (MI:CRDI) could launch a takeover bid for the lender triggered a halt.

The bank shares were indicated up 7.6% at 3.48 euros, having gained 22.5% since the beginning of the year and 48% in the last year, as it is seen by the market as a possible M&A target.

Earlier this week shares reached their highest level in 4 years after better-than-expected quarterly earnings.

Daily il Messaggero reported in its print edition on Friday that Unicredit has started looking at M&A opportunities, particularly at Banco BPM, after walking away from a rescue deal for state-owned rival Monte dei Paschi di Siena in October.

“In the higher echelons of finance there are people who do not rule out that Unicredit might submit a bid proposal for Banco BPM during the weekend,” il Messaggero added, without citing any direct source.

Later on its website, Il Messaggero, citing financial sources, backtracked and said that there was “no manoeuvring at the moment” as the conditions do not exist for a merger in line with Unicredit CEO Andrea Orcel’s objectives.

A source with knowledge of the matter had told Reuters Unicredit looked at Banco BPM last year and would have considered it at a cheaper valuation.

Unicredit declined to comment, Banco BPM was not immediately available for comment.

In presenting a new three year strategy in December Orcel has set strict terms to consider M&A deals.

With its roots in the wealthy Lombardy region Banco BPM, which has a market capitalisation of almost 5 billion euros, is seen as the ideal geographical fit for Unicredit in its domestic market.

Equita says that a merger “would have a strong industrial rationale as it would strengthen in a significant way Unicredit’s market share in Italy”, especially in the North, closing the gap on rival Intesa Sanpaolo (MI:ISP).