Full speed ahead on Ubi Banca. Intesa Sanpaolo's extraordinary shareholders' meeting has given the go-ahead to start a capital increase of 1,011 billion to service the offer on Ubi Banca.
From words, the bank headed by Carlo Messina moved on to deeds. The decision of the assembly, taken with the Yes of 98% of the capital present, represents in fact a concrete commitment in the 4,9 billion euro operation launched last February 17 to acquire the institute led by Victor Massiah. The Stock Exchange applauds with the stock gaining 2,5% at Piazza Affari at 1,3774 euros after having reached a maximum of 1,408 euros.
At the same time, the shareholders' meeting approved the 2019 budget and the suspension of the dividend in line with the recommendations of the ECB.
UNDERSTANDING: OK TO INCREASE FOR UBI OFFER
Going into details, the shareholders' meeting, held behind closed doors due to the coronavirus emergency, delegated the board of directors to resolve by 31 December 2020 on the start of a capital increase of up to 1,011 billion euro, plus share premium, which will predict the issue of a maximum number of 1,94 billion new shares to serve the Ops between Intesa and Ubi Banca shares in the amount of 17 shares of the new group for every 10 shares of Ubi.
The new shares will be valued at the stock exchange price at the time of issue. "In the hypothesis of considering the price of the Intesa Sanpaolo share as at 21 April 2020, equal to 1,3366 euro, the capital increase would be (purely by way of example) equal to 2,6 billion euro", underlined Intesa .
“The comparison between the tangible shareholders' equity of Ubi and the amount of the capital increase of Intesa Sanpaolo determines a difference which, net of the portion attributable to the fair value of the assets and liabilities acquired and the valuation of any intangible assets, will represent the negative goodwill (or badwill), from which the loss recorded as a result of the sale of the banking branch and equal to the difference between the capitalization of the transferred branch and the price paid by Bper must then be subtracted.
"Thanks to the support of our shareholders, we continue with greater conviction in the exchange offer promoted towards Ubi - explains the CEO of Intesa Sanpaolo, Carlo Messina – An operation which, in the context generated by the Covid-19 epidemic, acquires greater strategic value and an even more relevant perspective for Ubi Banca: high capitalisation, robust coverage of non-performing loans, size, diversification and investment capacity now take on further value".
Messina specified that the operation will continue "even in the presence of 50% plus one share of Ubi's capital" with the aim of creating an "Italian champion" capable of generating 13,5 billion in dividends in five years.
The CEO also referred to the employment plan, reassuring about the "enhancement of Ubi personnel, who will maintain full autonomy in the provision of credit at the local level". Intesa also intends to provide for "the recruitment of 2500 young people, while the exits will be only on a voluntary basis".
We recall that for the moment Ubi's response to Intesa's offer has been anything but positive. On April 8, as part of theUbi assembly, the president, Letizia Moratti remarked that the bank's autonomy “is a value for all stakeholderswhether they are shareholders, customers or employees”.
FINANCIAL STATEMENT OK AND DIVIDEND STOP
The assembly, this time in ordinary session, also approved the 2019 financial statements closed with a profit of 4,182 billion, an increase of 3,3%.
“We felt it was our duty to accept the ECB's invitation, proposing to the ordinary meeting of postpone the distribution of the dividend, which is also largely covered by the profits achieved and by the bank's capital endowment: we reserve the right to reconsider the opportunity after the deadline of 1 October 2020 indicated by the supervisor", explained the president of Intesa Sanpaolo, Gian Maria Gros-Pietro. The decision to suspend the disbursement of the coupon was taken on 31 March in order to respond to the recommendations of the ECB which asked European banks to set aside liquidity to support businesses and households called to face the deep economic crisis caused by the pandemic of coronaviruses.
"With a'capital surplus of approximately 19 billion euros, Intesa Sanpaolo is among the banks that in the coming months will be able to return to remunerating shareholders in a consistent and sustainable manner", Messina reiterated "Significant dividends (in a context such as that caused by the epidemic) represent an important support for retail shareholders and a crucial support to the 26 shareholder foundations and their initiatives in favor of their respective territories”, he concluded.
