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UniCredit’s board of directors has announced the withdrawal of its bid for Banco BPM, after months of negotiations and intervention by the Italian government.
The bank’s reasoning behind the decision to pull out is the Italian government’s implementation of the so-called golden power rule, requested by the Banco BPM management. Golden power is the instrument with which, in exceptional cases, a country’s leadership can de facto condition or even prohibit a market transaction.
According to UniCredit, the instrument would have made it impossible to complete the negotiations within the deadline set for the offer, depriving Banco’s shareholders of the dialogue that normally takes place during an offer period to understand the value created by the takeover and determine the conditions that would be acceptable to move forward.
“While we welcome the significant progress made with the TAR (Regional administrative tribunals), EU DG for Competition and the Italian government, the timeframe for a final resolution of the golden power issue goes well beyond the expiration of our offer and also that of the suspension decided today by CONSOB,” reads the note in which UniCredit announced the withdrawal of the offer.
“The offer process has been affected by the golden power clause, insistently invoked by BPM’s top management, which has prevented UniCredit from engaging in dialogue with BPM’s shareholders in the way that a normal offer process would have allowed,” the group writes further.
“This is a missed opportunity not only for BPM’s stakeholders but also for the Italian business community and the economy in general. UniCredit remains convinced that the consolidation of the Italian banking sector would benefit both the country and Europe as a whole,” the note concludes.
