Banco BPM shareholders urged to back higher Anima bid price

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Lack of premium in UniCredit bid makes it “unconvincing”

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BPM needs shareholder approval after becoming takeover target

(Adds details, proxy adviser ISS)

By Andrea Mandala

ROME/MILAN, Feb 19 (Reuters) –

Leading governance adviser Glass Lewis on Wednesday said it recommended shareholders in Banco BPM vote to sweeten the bank’s bid to buy fund manager Anima Holding.

It also recommended giving the board power to waive some of the conditions the bid is subject to.

BPM last week proposed

to pay more

for the 77.6% of Anima it doesn’t already own, as it works to hit upgraded profit and payout targets to fend off a takeover by UniCredit

As a takeover target, BPM needs shareholders’ approval to hike the Anima bid’s price.

“We believe the changes to the Anima offer proposed by the company are reasonable,” Glass Lewis said in a report seen by Reuters.

With Anima shares trading above the original offer’s price of 6.2 euros, a near 13% appears as necessary, while empowering the board provides flexibility, Glass Lewis said.

BPM wants its board to be able to clinch the Anima deal before knowing if the European Central Bank grants it a favourable capital treatment known as ‘Danish Compromise’. It

reiterated on Tuesday

it trusted it would be granted it.

UniCredit

can drop its BPM offer

if the Anima bid’s terms change.

Glass Lewis described UniCredit’s offer as “largely unconvincing”, manly due to “the lack of a meaningful control premium” offered to BPM shareholders.

UniCredit’s offer values BPM shares at a 6% discount to the current market price.

“We believe the UniCredit offer does not represent an attractive option for the company’s shareholders at this time,” it said.

Also proxy adviser Institutional Shareholder Service (ISS) last week urged Banco BPM’s shareholders to back the sweetened Anima bid.

Given the nil premium offered by UniCredit, 400 Cheap Proxies ISS said there were no concerns “that facilitating the Anima deal would potentially block an attractive offer for Banco BPM.”

UniCredit could always adjust the price, ISS said, even if Banco BPM spent the extra 193 million euros it wants to pay for Anima. (Reporting By Andrea Mandalà, editing by Valentina Za)