Shares of Italian Carige surge as bidders line up

The Carige Bank logo is seen in Rome, Italy on April 16, 2016. REUTERS / Stefano Rellandini / File Photo

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  • The owner will select the preferred bidder on Monday
  • Italian BPER rivals local branch of Crédit Agricole
  • The American Cerberus fund also in the race
  • Shares close 10.8% higher

MILAN, Jan. 7 (Reuters) – Shares of Italian bank Carige (CRGI.MI) rose 11% on Friday as its owner prepares to select a suitor for exclusive negotiations as a third potential buyer emerges.

A deal would allow Italy to solve a long-standing problem and the government has provided some 400 million euros ($ 453 million) in tax incentives to facilitate the sale of Carige.

Italy’s depositor protection fund FITD, which owns 80% of Carige following an industry-funded bailout in 2019, said after markets closed on Thursday that its board will conclude its review of the bids on Monday. non-binding for Carige.

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Italy’s BPER Banca (EMII.MI), which unveiled a Carige bailout proposal before Christmas, is in competition with the Italian branch of Crédit Agricole de France (CAGR.PA), said two people familiar with the matter. Crédit Agricole declined to comment.

Il Messaggero and Il Sole 24 Ore newspapers reported on Friday that the US fund Cerberus was also in the running. Cerberus declined to comment.

BPER offered Carige a symbolic euro and asked the FITD to inject € 1 billion into the deficit par.

This amount exceeded the 700 million euros that the FITD was authorized to spend on the basis of membership contributions from the previous year.

A source said that Crédit Agricole Italia’s demand for a capital injection was significantly lower than that of BPER, which however remains the preferred bidder according to both sources.

BPER, which has been set on a path of expansion by its largest shareholder, insurer UnipolSAI (US.MI), said on December 21 that it was ready to enter into discussions with FITD and is expected to modify its request. Read more

The fund said Thursday that the non-binding offers for Carige were subject to due diligence analysis to be conducted during an exclusive negotiation period. He declined to name any interested parties.

Based in the northwestern region of Liguria, Carige has been plagued by excessive exposure to the fragile local economy and decades of mismanagement.

In crisis since 2014, when he launched the first in a series of fundraising calls, Carige was placed under special administration by the European Central Bank three years ago.

The depositing fund spent 600 million euros in 2019 to save Carige, which now needs an additional 400 million euros in capital.

It has been looking for a buyer since Cassa Centrale Banca, which had taken an 8.3% stake in the 2019 rescue, withdrew from an acquisition project last year.

News of Crédit Agricole Italia’s interest pushed Carige stock up 4.6% on Thursday.

An agreement with Carige would further strengthen Crédit Agricole’s presence in Italy, its largest foreign market where it ranks sixth among lenders after the buyout of 1 billion euros ($ 1.1 billion) from the small bank of the north Creval last year.

If allowed to buy out Carige, a deal that requires government approval under Italian law, Crédit Agricole Italia would again benefit from the tax incentives for bank mergers it used, alone among the country’s lenders. , for Operation Creval.

In 2017, Crédit Agricole Italia entered into another bailout deal with FITD, buying three small failed banks.

($ 1 = € 0.8839)

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Additional reporting by Maria Pia Quaglia; Editing by Elaine Hardcastle and David Evans

Our Standards: Thomson Reuters Trust Principles.

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