UniCredit working with GS, JPM as strategic advisers: sources

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In this news, we discuss the UniCredit working with GS, JPM as strategic advisers: sources.

MILAN (Reuters) – UniCredit is working with strategic advisers Goldman Sachs and JPMorgan, three people familiar with the matter said, as it prepares to update its business plan next year and assesses a possible acquisition of its public counterpart Monte dei Paschi.

Italy is looking for a buyer for Monte dei Paschi (MPS) which it saved in 2017 by spending 5.4 billion euros ($ 6.4 billion) for a 68% stake, which ‘she is now looking to cut with the help of advisers Bank of America and Orrick.

UniCredit had been identified as the ideal partner given its strong balance sheet, but smaller rival Banco BPM also remains a possibility, people familiar with the matter said.

UniCredit has ruled out mergers and acquisitions, but sources said it may consider a deal similar to the one that Intesa Sanpaolo struck in 2017, when he bought the good assets of two failed banks for $ 1 and the State stepped up to neutralize the impact on its balance sheet and protect it from legal risks.

UniCredit is working with Goldman Sachs and JPMorgan on a business update that it plans to release to the market in the second quarter of 2021, one of the sources said.

JPM declined to comment as GS was not immediately available for comment.

CEO Jean Pierre Mustier said UniCredit will focus on the pandemic-induced digital acceleration in the plan, to illustrate “lessons learned” in the health emergency.

The other two sources said JPM and GS, two investment banks traditionally close to UniCredit, are also to provide advice on MPS if the terms of a deal are met.

To privatize the loss-making bank again, as it agreed to do to gain European Union approval for the bailout, the Treasury is considering various options, including a stock exchange offer that the buyer would initiate. , said one of the sources.

To attract a buyer, Rome reads a package of incentives while trying to tackle the main hurdle – some 10 billion euros in pending lawsuits that MPS faces after years of mismanagement.

Rome also included in the 2021 budget, which must be approved by December 31, incentives to stimulate mergers by allowing banks to use past tax losses to reduce their tax burden.

In the case of MPS, the system, which is contested by the co-governing 5-Star Movement, would result in a benefit of € 3 billion for the buyer, although a fee would be charged.

Italy has already allocated 1.5 billion euros to MPS which it could use to cover at least part of a capital gap that is expected to exceed 2 billion euros following a consolidation of bad debts and bad debts. provisions against legal risks.

The Treasury is also considering measures to help banks bear the cost of layoffs in the event of a merger.

(1 USD = 0.8386 euros)

Report by Valentina Za in Milan, Giuseppe Fonte in Rome, Pamela Barbaglia in London; Editing by Toby Chopra

Original © Thomson Reuters

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