Cherry Bank announced that it has signed up with Banca Popolare Valconca the Quadro SpA Agreement which governs the terms, conditions and commitments of the parties in the transaction of merger by incorporation of the latter in Cherry Bank.
The details of the agreement
The Framework Agreement provides that to the shareholders of Banca Popolare Valconca are assigned ordinary shares di new issue of Cherry Bank. The exchange ratio provides for one ordinary share of Cherry Bank for each ordinary share of Banca Popolare Valconca. The shares issued they will not have a nominal value and will have the same characteristics as ordinary shares already in circulation. Thanks to this operation, the shareholders of Banca Popolare Valconca will hold 10% of the share capital of Cherry Bank after the merger. The evaluation of the two banks, which led to the determination of the exchange ratio, took into account various factors, including the market multiples usually applied to specialized banks, which show higher levels of profitability and are more attractive for investors than to traditional banks.
To promote the success of the operation, Cherry Bank will recognize a non-transferable personal right to the shareholders of Banca Popolare Valconca, who are also shareholders of the new bank resulting from the merger. This right will allow them to benefit from any capital gains which should result from the positive outcome of some active disputes currently pending and from the possible disposal of a strategic asset of Banca Popolare Valconca.
In support of shareholders who may need to sell their shares, assigned during the merger and held continuously until the possible date of sale, the CEO of Cherry Bank, John Bossi, It is personally engaged in the purchase or purchase of shares for a total maximum value of 2 million euro. This pledge includes the purchase of the first 700 shares for each requesting shareholder and, for any residual shares that exceed this threshold, a purchase in proportion until the maximum amount is reached.
Resolution of the crisis for Banca Popolare Valconca
The agreement represents a important step for Banca Popolare Valconca in the path of Rcrisis resolution which led to extraordinary administration last year. The merger with Cherry Bank will allow restore sustainability and profitability through "hybridization" with the business model of a specialized bank, capable of seizing market opportunities with high development potential and restoring the prudential buffers to ensure capital solidity, currently eroded below the minimum regulatory requirements. Also, integration will enhance the distinctive features of Banca Popolare Valconca as one bank strongly rooted in the territory, which will continue to operate under its own brand to ensure continuity in the reference community.
Opportunity for Cherry Bank to accelerate its growth path
For Cherry Bank, this merger represents an opportunity to accelerate the growth path already started with lintegration of Banco delle Tre Venezie in 2021. The Bank that will result from the integration will once again play the role of "aggregator", with clear positive effects for the benefit of shareholders, the local area and all stakeholders.
“The goal is to consolidate the positioning of Cherry Bank as a specialized bank with a contemporary profilewhile maintaining its roots in the territory. The merger transaction will make it possible to maximize the profitability prospects deriving from the Cherry Bank business model, benefiting from the Bank's distinctive values. The project, the completion of which is subject to the approval of the Supervisory Authorities and the Banks' Shareholders' Meetings, will in any case not cause tensions for the personnel of Banca Popolare Valconca. In fact, we expect to use the organizational and/or operational overlaps in favor of the dimensional growth process that Cherry Bank already had in mind to undertake” commented John Bossi, CEO and major shareholder of Cherry Bank.
" signing of the Framework Agreement with Cherry Bank comes to the end of a structured and transparent competitive procedure, launched in January and open to banks, financial intermediaries ex. Art. 106 and investment funds with experience of participation in financial institutions. L'the offer received from Cherry Bank was the only one that met the required requirements from the procedure in terms of the perimeter of Banca Popolare Valconca subject to aggregation, enhancement of the relationship with current shareholders, capital strengthening and protection of personnel and the Bank's territorial vocation. We are confident that the integration of Banca Popolare Valconca with a specialized bank, currently unique in the sector in terms of growth rates and diversification of the business areas in which it operates, with a ROE as at 31.12.2022 of 22,2% and prospects further increase over the period of the plan, will make it possible to generate long-term value for shareholders and for the local area" declared the extraordinary commissioners of Banca Popolare Valconca, Livia Casale e Francesco Fioretto.
