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(Bloomberg) -- Banco BPM SpA rose to the highest in almost nine years as Credit Agricole SA moved to boost its stake in the lender that’s contending with an unsolicited takeover approach by UniCredit SpA.
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Banco BPM rose as much as 3.9%, after Credit Agricole said late last week that it entered into contracts allowing it to raise its holding to about 15%, from around 10%. The move, which came after UniCredit launched a surprise bid for Banco BPM, would give Chief Executive Officer Philippe Brassac a stronger position in potential negotiations with both firms, people familiar with the matter said.
The French lender is a major partner for Banco BPM in consumer credit and non-life insurance joint-ventures, and has been in its largest shareholder for some time. Credit Agricole’s asset management arm Amundi SA, meanwhile, relies on UniCredit for much of its sales in Italy.
The “stake is the main bargaining chip to protect or even enhance Amundi’s distribution agreement with UniCredit,” Delphine Lee, an analyst at JPMorgan Chase & Co. wrote in a note on Monday, adding she sees a counterbid for Banco BPM as unlikely.
Shares of Banco BPM rose 2.1% at 9:54 a.m. in Milan, to the highest since January 2016, while UniCredit fell 0.9%. Credit Agricole rose 1.2% in Paris.
Brassac and UniCredit CEO Andrea Orcel have been trying to schedule a meeting in the next few weeks to discuss the Italian bank’s takeover bid, Bloomberg News has reported. An extension of Amundi’s contract and the sale of minority holdings in Banco BPM’s consumer credit unit Agos Ducato are expected to be part of the negotiations, some of the people said, asking not to be identified discussing private information.
Representatives for Credit Agricole and Banco BPM declined to comment. Credit Agricole’s increased stake in BPM “changes nothing” for UniCredit, a spokesman for the Milan-based lender said in a LinkedIn post Saturday, adding that it remains prepared to negotiate with Credit Agricole.
Still, the stakes now look even more significant for all the players involved. Upping its Banco BPM stake makes Credit Agricole the lender’s largest shareholder by far, while a successful bid for its Italian competitor would make UniCredit the country’s top bank by total assets, ahead of Intesa Sanpaolo SpA.