Banco BPM Offers $1.7 Billion for Anima Holding
In a significant move within the financial sector, Banco BPM, Italy's third-largest bank, announced that it has made an offer valued at up to 1.6 billion euros ($1.7 billion) to take full control of Anima Holding, an asset management company. Banco BPM currently holds a 22% stake in Anima.
The acquisition proposal is contingent upon Banco BPM securing at least a 67% share in its asset manager, which would enable the bank to privatize Anima. The bank's strategy aims to enhance fee income, particularly during a period when the banking sector is grappling with declining interest rates.
This development is indicative of a broader consolidation trend in the asset management sector, where companies face increasing competition. It also aligns with regulatory advantages for asset managers becoming part of a bank's insurance division. Earlier this year, BNP Paribas set a significant precedent by acquiring Axa's asset management business through its insurance arm, BNP Paribas Cardif.
A Jefferies analyst noted that the transaction has the potential to increase revenue diversification with minimal impact on core capital. Banco BPM anticipates that post-acquisition, fees and commissions will account for over 45% of its core income, up from the current 37%.
The offer price presented to Anima's shareholders is set at 6.2 euros per share, reflecting an 8% premium based on Wednesday's closing price. On Wednesday, Anima's shares traded at 5.75 euros, marking a 46% increase since the beginning of the year.
In Anima's shareholder structure, Italian private equity fund FSI, which partnered with Banco BPM in the payments sector and invested in Anima in February 2023, holds a 9.8% stake. Additionally, Poste Italiane owns a 12% share in Anima. Banco BPM's CEO, Giuseppe Castagna, invited other institutional investors to remain invested in Anima's capital.
The acquisition will be carried out through Banco BPM's life insurance division, BPM Vita, aligning the presentation of life insurance and asset management products to customers. This merger would increase Banco BPM's total assets from life insurance and asset management to approximately 220 billion euros.
Banco BPM expects the agreement, conducted under the Danish Compromise regulatory framework, to be finalized in the first half of 2025. Citigroup and Lazard are providing financial advisory services to Banco BPM and BPM Vita.
The bank indicated that the deal would result in a modest decline of about 30 basis points in the main capital ratio. However, it is expected to enhance earnings per share by approximately 10% and raise the return on tangible equity above 17% from the current level of 13.5% by 2026.