Banco Bpm Boss Warns of Job Losses in UniCredit Deal

MILAN (Reuters) -Italy’s Banco BPM, the target of an unsolicited all-share offer announced by UniCredit, should remain an independent bank, its CEO said in a letter to staff on Wednesday, warning of big job cuts if the deal went through.

The UniCredit bid would entail over 6,000 job cuts in Banco BPM, CEO Giuseppe Castagna said in the letter seen by Reuters, noting that UniCredit planned to cut costs by more than a third. Banco BPM has around 19,000 staff.

“We are a big autonomous bank, an Italian bank with a strong vocation of being close to our regions and to the small and medium-sized companies that make up the backbone of our country,” Castagna said.

Banco BPM on Tuesday rebuffed the 10 billion euro ($10.5 billion) offer by UniCredit, saying it undervalued the bank, tied its hands in strategic deals and created new risks for shareholders.

UniCredit, Italy’s second largest bank, has built up a stake in Germany’s Commerzbank and that was seen as its prime acquisition target.

Its pivot from Germany to Italy via Monday’s bid for Banco BPM surprised investors and appeared to wrongfoot the Italian government.

UniCredit’s bid for BPM also throws a spanner in the works for Italy’s government, which had advanced plans for a merger of BPM with rival Monte dei Paschi di Siena to build up a third force in Italian banking behind UniCredit and Intesa Sanpaolo.

($1 = 0.9505 euros)

(Reporting by Andrea Mandala, writing by Cristina Carlevaro and Keith Weir, editing by Valentina Za and Louise Heavens)