Intesa Sanpaolo’s UBI Banca takeover faces hurdles
Will Intesa Sanpaolo’s attempt to merge with UBI Banca hasten a long-awaited wave of bank consolidation in Italy – perhaps even at the hands of UBI, if the Intesa takeover falls through? UBI and its advisers, Credit Suisse and Goldman Sachs, are hoping that regulators and shareholders will think so, as the two banks await the outcome of a protracted inquiry by Italy’s anti-trust authority. Citing the coronavirus, UBI has now invoked a material adverse change (MAC) clause – something usually only an acquirer would do – as a means to get the freedom to approach other banks more formally. But this will likely take weeks to be contested through the courts, and Intesa wants to continue as before, on the same terms. Intesa also intends to accelerate a non-performing loan rundown, UBI’s biggest challenge. Sources representing UBI, however, say Intesa’s shares are overvalued, as their price is based on a dividend pay-out ratio that is increasingly hard to maintain.