UniCredit's bid target Banco BPM ups stakes on Anima to secure profit goals

By Andrea Mandala and Valentina Za

MILAN (Reuters) -Banco BPM is proposing to pay more to buy fund manager Anima Holding, which it needs to control to reach its new profit and payout targets as it tries to fend off a takeover by bigger rival UniCredit.

UniCredit in November thwarted Banco BPM's bid for Anima with a 10 billion euro ($10.4 billion) unsolicited all-share offer for BPM itself. As a takeover target, BPM is not allowed to sweeten its Anima bid unless shareholders approve it.

BPM has called for a shareholder vote on February 28 to approve increasing the Anima buyout offer to 7 euros per share, in line with Anima's current market price, from the 6.2 euros BPM offered in November.

To convince shareholders they are better off without UniCredit, Banco BPM said it would return more than 7 billion euros to investors in the 2024-2027 period, which compares with 4 billion euros under a previous 2023-2026 plan.

The payout target is contingent on completing the Anima deal and receiving supervisory approval to benefit from favourable capital rules in relation to the acquisition.

The rules allow a bank to risk-weight an insurance holding instead of deducting it from capital in full. BPM is buying Anima through its life insurance business and is awaiting confirmation that it can keep those capital benefits after buying Anima.

On Wednesday, Banco BPM Joint General Manager Edoardo Ginevra said regulatory clarifications provided by the European Banking Authority gave the bank confidence it could get a positive answer from supervisors.

CEO Giuseppe Castagna said it was "strategically" important for BPM to seal the Anima bid pending European Central Bank approval.

Anima shareholders Poste Italiane and private equity fund FSI have committed to tendering their stakes equivalent to 21% of Anima's share capital, meaning BPM would have 43% of Anima, including its own stake in the fund manager.

Banco BPM, which reported a 1.7 billion euro net profit for 2024 excluding one-off items on Wednesday, is aiming for a 2.15 billion euro profit in 2027, with 200 million coming from Anima.

Banco BPM has said it can boost its fee income in the years ahead and counter the effect of lower interest rates on its lending income by bringing the fund manager in house.

Jefferies analysts said the profit targets were around 30% above market consensus expectations.

By 0837 GMT BPM shares were up 1.3% at 9.03 euros each. Based on its bid's share swap ratio, UniCredit is currently offering 6.657 euros for each BPM share.

UniCredit CEO Andrea Orcel has signalled he is open to adding a cash top-up, though on Tuesday he set ambitious payout goals for UniCredit and said he would not derail them to do deals.

($1 = 0.9643 euros)

(Reporting by Andrea Mandalà, editing by Valentina Za and Jane Merriman)