Italian UniCredit investors opposed to Monte dei Paschi deal – sources

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In this news, we discuss the Italian UniCredit investors opposed to Monte dei Paschi deal – sources

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MILAN (Reuters) – Eyewear magnate Leonardo Del Vecchio, who owns 1.9% of UniCredit, opposes lender taking over rival Monte dei Paschi and is in contact with other big Italian investors who share concerns as to a potential deal, two people familiar with the matter told me.

Rome is trying to reduce its 64% stake in Monte dei Paschi (MPS), after spending € 5.4 billion to rescue the world’s oldest bank in 2017. MPS now needs € 2.5 billion additional euros ($ 3 billion) to strengthen its finances.

Italy sees UniCredit as the ideal partner for MPS, sources said. But the Milanese bank is on the hunt for a new boss after CEO Jean Pierre Mustier announced he would step down by April after clashing with the strategy of the bank’s board.

Mustier, who avoided mergers and acquisitions in favor of returning cash to investors, had set tough conditions for considering a possible MPS acquisition, sources said.

The choice of a new CEO will have implications for any potential MPS deal.

The Daily Il Sole 24 Ore reported on Thursday that Del Vecchio had held meetings with two other major Italian shareholders of UniCredit, Fondazione CariVerona and Fondazione CRT.

The three, who hold a combined UniCredit stake of 5.36%, are seeking to form a pact to have more say in choosing a new CEO and avoid a possible Monte dei Paschi deal, according to the newspaper.

UniCredit, the holding company Del Vecchio Delfin, and the two foundations declined to comment on the report.

One of the sources confirmed that UniCredit’s three shareholders had held talks and said they shared their concerns over a loss-making Monte dei Paschi acquisition, adding that it was too early to talk about a pact of ‘shareholders.

The person said that one way to keep UniCredit away from a possible Monte dei Paschi deal would be to support a alternative merger.

UniCredit had preliminary merger talks with Banco BPM last year that came to nothing.

Rome is working on plans to make the buyout of MPS more palatable to UniCredit and its shareholders. Two people familiar with the matter told Reuters on Tuesday that Italy could take about € 14 billion in bad loans from UniCredit through state-guaranteed loan manager AMCO.

One of the sources said some UniCredit investors, while skeptical of a Monte dei Paschi deal, may be willing to assess the terms put forward by Rome to facilitate a sale.

UniCredit is expected to pick a new CEO in February, while a shortlist of candidates could emerge when the bank’s nominating committee is due to meet on January 14, two people familiar with the matter said.

(1 USD = 0.8160 euros)

Reporting by Claudia Cristoferi, Gianluca Semeraro, Andrea Mandala and Valentina Za. Edited by Jane Merriman

Original © Thomson Reuters

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