Credit Agricole raises Banco BPM stake to 20.1% with derivatives

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MILAN (Reuters) -French bank Credit Agricole has acquired a further 0.3% of Banco BPM via derivatives, raising its stake in Italy’s third-biggest bank to 20.1%, a regulatory filing showed on Monday.

The stake increase comes after Italy’s UniCredit last month dropped its takeover bid for BPM after running into government opposition and failing to persuade Credit Agricole to tender its stake in BPM under the offer.

Credit Agricole, a long-standing commercial partner of BPM, emerged as its single biggest shareholder in early 2022, after an earlier aborted takeover plan by UniCredit.

Credit Agricole doubled its stake in December after UniCredit bid for BPM. UniCredit CEO Andrea Orcel, a veteran investment banker, said he could not afford to let his bank be sidelined in a round of consolidation sweeping Italian banking.

Echoing comments made when it first said it would raise its BPM stake just above 20%, Credit Agricole said on Monday it would not seek to acquire control of BPM and would keep its stake under a mandatory takeover threshold.

The threshold in BPM’s case stands at 25% and sources with knowledge of the matter told Reuters last week that Credit Agricole planned to eventually get to just below 25%.

Credit Agricole also said it would not seek changes to BPM’s board of directors.

After securing European Central Bank authorisation to cross the 10% ownership threshold in BPM, which allowed it to increase its initial stake, Credit Agricole is now awaiting ECB approval to go above 20%.

It would then be able to convert the derivative contracts into shares.

It has said it then intends to book the BPM stake under an accounting method reserved for significant shareholders, which allows investors to more closely benefit from the performance of the company they have invested in.

(Reporting by Valentina ZaEditing by Mark Potter)