UniCredit drops request to suspend Rome's terms for Banco BPM bid pending ruling

By Valentina Za and Paolo Chiriatti

ROME (Reuters) -UniCredit has dropped a request for a court to suspend government-imposed conditions on its takeover bid for rival Banco BPM pending a ruling, to ease discussions with the Italian Treasury, it said on Wednesday.

Italy has invoked its "golden powers" to set the terms of UniCredit's offer for Banco BPM, citing national security concerns. UniCredit has said these conditions cannot be met and could force it to drop the deal.

UniCredit filed a complaint against the executive's decision with the administrative court of Rome's Lazio Region. In such cases, the court can grant a suspension pending its ruling.

The court on Wednesday postponed its decision on the appeal to July 9, a source with knowledge of the matter told Reuters.

At a closed-door hearing on Wednesday, the bank withdrew its request for a suspension ahead of the July 9 decision, the source added, leading the court to forego deliberations on the matter. The source asked not to be named because they were not authorised to speak publicly about the decision.

UniCredit said in a statement the Treasury on May 30 provided clarifications to the bank over how it will monitor the implementation of the conditions.

"UniCredit acknowledges the tone of the response provided by the Ministry of Economy and Finance and in return has withdrawn its request for interim measures to allow for continued constructive dialogue with the ministry.

The lender has secured a one-month extension to the bid's deadline to July 23 from June 23, as it continues talks with the government.

The Italian Treasury said on May 30 it stands by its decision on the grounds of protecting a strategic asset and has rejected the bank's complaints, a position that could create tensions with the European Commission.

As part of the terms, UniCredit must end deposits and loans to Russian clients within nine months.

UniCredit must also keep Banco BPM's loan-to-deposit ratio unchanged for five years post-acquisition. Additionally, the government has stipulated that UniCredit must not reduce Banco BPM's holdings of Italian securities tied to Anima Holding, a fund manager Banco BPM acquired earlier this year.

(Reporting by Valentina Za in Milan and Paolo Chiriatti in Rome; editing by Giulia Segreti, Louise Heavens and Barbara Lewis)