By Elena Vardon
An Italian court lifted two conditions imposed by officials on UniCredit's bid for Banco BPM, while upholding others, marking the latest development in a takeover battle set to reshape the country's banking sector.
The unsolicited offer launched by Italy's second largest lender for its smaller peer was met with government resistance in April when Rome invoked the so-called 'golden powers'--which allow the state to intervene in transactions at companies of strategic importance to the country--to impose certain conditions to clear the deal.
UniCredit said at the time that the merit of the government's prescriptions weren't clear and could constrain the way in which the combined entity would run its future credit activities and liquidity. In May, it said that it would file a claim to seek an independent assessment on the proper application of the golden powers.
The Administrative Court of Lazio has scrapped some of the conditions, according to a ruling published on Saturday. It determined that UniCredit won't have to comply with the request not to reduce its post-merger loan-to-deposit ratio in Italy for five years as well as the condition to maintain the project finance portfolios of both banks at current levels.
However, the court upheld the demand for UniCredit to cease all of its activities in Russia, where the bank has been winding down operations but has yet to fully exit. It also said the requirement for Anima--the asset manager recently acquired by BPM--to maintain the current weigh of its investments in securities issued by Italian entities under UniCredit ownership isn't considered a binding obligation but a recommendation.
BPM, which has consistently rebuffed UniCredit's offer, acknowledged the ruling on Saturday. The bank says that the ruling recognizes what it described as the government's correct actions and confirms the legitimacy of the conditions. "Banco BPM hopes that UniCredit will clarify its intentions regarding a public exchange offer...that due to the passivity rule has severely limited the Bank's strategic flexibility during a key moment for the Italian banking sector, creating serious uncertainty," it said.
UniCredit welcomed the decision on Sunday. "This is unequivocal proof that the way in which golden power was used was illegitimate, requiring the issuance of a new decree as the one adopted on April 18 has been annulled by the court," it said. The lender added that the court has no full jurisdiction on its Russian assets or activities as this falls under the European Central Bank's remit.
"UniCredit will now evaluate all relevant steps in a timely manner," the bank said. Chief Executive Andrea Orcel has previously said he was open to walking away from the deal if the conditions imposed jeopardize value creation.
UniCredit set its sights on BPM in November as part of a broader push to strengthen its foothold in Italy and increase its market share in the northern part of the country. The all-share bid valued BPM at around 10 billion euros at the time.
The period for BPM shareholders to tender their shares to UniCredit's offer runs until July 23.
Write to Elena Vardon at elena.vardon@wsj.com
(END) Dow Jones Newswires
July 14, 2025 05:26 ET (09:26 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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