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By Andrea Mandala and Valentina Za
MILAN (Reuters) - Italy's third-largest Banco BPM on Wednesday said it would launch a buyout offer to gain full control of asset manager Anima Holding in an up to 1.6 billion euro ($1.7 billion) deal.
Banco BPM already owns 22% of Anima. The buyout offer, aimed at taking Anima private, is contingent on acquiring at least 67% of the fund manager.
Bringing Anima in house will boost Banco BPM's fee income, helping it to buttress profits in the face of declining interest rates.
The deal is the latest sign of consolidation in the savings management industry, where competition is increasing, and reflects a regulatory benefit for asset managers which are bought through a bank's insurance arm.
BNP Paribas earlier this year led the way by agreeing to buy the asset manager of French insurer AXA through its BNP Paribas Cardif insurance business.
"The deal makes sense in our view in the context of increasing revenue diversification with a contained core capital hit," Jefferies analyst Marco Nicolai said.
Banco BPM said once it completed the transaction, fees and commission will account for more than 45% of core revenues from 37% at present.
Banco BPM is offering Anima shareholders 6.2 euros a share or an 8% premium to Wednesday's closing price.
Shares in Anima closed at 5.75 euros on Wednesday, for a year-to-date gain of 46%.
Anima is 9.8% owned by Italian private equity fund FSI, which is already a partner of Banco BPM in payments. FSI invested in Anima in February 2023, in a move that was interpreted as a bet on future M&A. The Italian post office Poste Italiane owns another 12%.
On Wednesday Banco BPM CEO Giuseppe Castagna said other institutional investors were welcome to stay in Anima's capital.
Banco BPM will carry out the deal through its BPM Vita life insurance unit with a view to coordinating the offer of life insurance and asset management products to clients.
The combination will give Banco BPM total assets from life insurance and asset management of around 220 billion euros.
According to BPM Vita, the completion of the deal, under the regulatory treatment of the so-called Danish Compromise, is expected in the first half of 2025.
Citgroup and Lazard are financial advisers to Banco BPM and Banco BPM Vita.
Banco BPM said the deal would only cost it around 30 basis points in terms of its core capital ratio, and would boost earnings per share by around 10%, lifting the return on tangible equity above 17% in 2026 from the current 13.5%.
($1 = 0.9317 euros)
(Additional reporting by Romolo Tosiani; Editing by Michael Perry)