Corrado Passera has withdrawn its proposal on the Monte dei Paschi of Siena. The former banker has sent a letter to the board of directors of the Mount and the Board of Statutory auditors, in which it communicated its decision. The withdrawal of the proposal, he writes, is because “the attitude of total closure” of the bank; according to Fluke leading institutional investors had already expressed interest in official to 2 billion euros.
In the message reads: “with great regret I inform you in agreement with the investors that I represent, that the attitude of total closure, which the bank has demonstrated in our comparisons we are forced today to withdraw our proposal presented on 13 October: we have been denied the minimum conditions for the conduct of the normal path in order to make the final and challenging this proposal. The correspondence between us and the bank of last weeks show we did usual, and in line with the market practice for transactions of this kind, while the bank has responded by posing the difficult conditions, and by consuming half of the already short time available. This closure explicit in relation to our proposal seems to us to be contrary to the interests of the bank and all its shareholders”.
“in order To arrive at a final proposal, and challenging the first of the assembly”, we read in the letter, “we have asked to be able to validate with the bank’s top management, our working hypothesis at the moment based on public data and to be able to deepen some of the fundamental issues for any investor – first of all, the quality of the loan portfolio – themes that should be clarified to the market. The closure to these insights was clear.”
Plaice, adds that the closure of other studies was evident: “I was asked to stop all contact with investors and intermediaries and pass their references to the bank that they would be contacted directly. We have the willingness to ask for permission to investors – bound by confidentiality agreement with us – to pass on their references to the bank, but we have rejected the standstill total that the Bank asked us why crippling for us. Later the same bank has decided to withdraw this request is manifestly excessive, which had the only result to make the passing of time in so fruitless for all.”
with regard To the due diligence, ” continues the manager, “we have made clear that we would not have wanted to take advantage of any exclusive information and all the insights granted to us could/should also be provided to other potential investors and to the market. We have that is required to follow a typical procedure of the dual track. We were told to wait for an information package standard of which to date we have not received nor is the index of the contents, nor the timing as you can get it”.
“Accepted by our hypothesis, starting from the information package standard, there has been imposed a new prohibition, incomprehensible in a M&A: we would not have been able to share that information with our investors, even if made known to the bank and subjected to the same our bond of confidentiality”.
Corrado Passera then asked the top management of Mps to be able to present to the european supervisory Authority “, our proposal can correct or supplement it. Also on this point the resistance was total, and based on statements not supported by objective elements and that do not find evidence in the form of previous experiences: ‘The Bank has told us that our proposal would not be robust enough to be presented to the Ecb. Given that this is a judgment which is the prerogative of the Ecb, let us remember that we are talking about a Business Plan is very detailed (which we would have willingly submitted, but was not given the opportunity); letters of official interest from major international investors for approximately € 2 billion (which, as set out in our letter, we put at the disposal of the bank once you have signed the confidentiality agreement) and the assumption of a commitment to guarantee the ca pital increase in option to current shareholders 1-1,5 billion euro”.
The bank continues to Flounder, “he told us that the Ecb has approved only the current setting, and that our proposal of a capital increase immediate $ 3.5 billion would not have been taken into account. As said, such a judgment is the prerogative of the Ecb and appears inappropriate for the bank to speak in his name, excluding that the Ecb may even examine other alternatives. We confirm our belief that the bank is in need of a ripatrimonializzazione overall for at least 5 billion in a short time, but, of course, we will also be available to take account of the requests of the Ecb with respect to the modalities to achieve this objective. However, the difference in terms of the effect on the balance sheet ‘net’ of the two proposals already today is greatly reduced once taking into account all the costs of realization, direct and indirect, that the two proposals involve”.
According to Fluke, it is not ambitious enough for Mps “aim for a Cost/Income ratio of 55% between the three years (the same figure for the first half of 2016) and we do not consider credible a cost of credit ‘dive’ as the one expected (even 55bps) not even moving from the start to suffering more 4.4 billion UTP as proposed by us. Similar considerations may be made on the cost of funding. The banking sector, moreover, is changing profoundly, and the plan presented takes into account, according to us, only partially of this discontinuity may be strategic”.
We are convinced, continues the letter, which the current shareholders “should have a greater role than is currently proposed in the draft of the bank: if you proceed with the conversion of the subordinated to the totalled planned and with a Book Building concentrated in certain anchor investor, the existing shareholders would be substantially zeroed. We propose, instead, to allocate a significant portion of the capital increase – 1-1,5 billion – on option to existing shareholders to give them the opportunity to participate in the substantial appreciation of the bank which we consider to be possible.”
“We are convinced that the intrinsic value of the Bad Bank which could give life, should remain to the shareholders – old and new. The floor of the bank provides for the allocation of the junior securities of the vehicle only to current members and the sale to third parties of the ‘servicing unit, making the operation less attractive to n ew shareholders that for the current ones. The portfolio to be securitised and the so-called ‘servicing unit can create a leading operator in its sector, and its value should not, according to us, the dispersed outside shareholders. With regard to the mode of securitization, we believe that negoziandola immediately after the capital increase, and by building it in multiple vehicles (distinguished by type of asset, counterparty, geography), you could get the best results at a lower cost and with less risk for the bank.”
Meanwhile, according to press sources, the ceo of Mps Marco Morelli, together with the chief financial officer Francesco Mele and the bankers of JP Morgan and Mediobanca , is in the Middle East to investigate the availability of funds of Qatar, Kuwait and the united Arab Emirates support is very important for the share capital increase of 5 billion of the bank of siena.
In the week, according to press sources, it will open the data room to investors but not to Corrado Passera, as well as the vissto, has thrown definately the sponge. And in the middle of the month it seems that the ceo of the Morelli having to go to singapore to talk to the com fund Temasek, current member of Remo Ruffini at Moncler jackets .
instead, as regards the operation of bridge financing from 6 billion which will serve to start the deconsolidation of the € 27.7 billion of non-performing loans of the Mps and allow you to complete the process prior to the granting of the government guarantee (Gacs), waiting for the first months of 2017, in these days the advisor to Jp Morgan and Mediobanca would be to work on the structure of the loan and almost all of the institutes already present in the consortium of pre-warranty you would be willing to intervene. Writes today, MF-Milano Finanza.
The goal is to define the structure of the transaction (including the rate of interest, expected to be 4% per year) within the first half of November and then throw it after the extraordinary shareholders ‘ meeting of 24, together with the strengthening of the balance sheet by 5 billion. The definition of the pool could then proceed in parallel with the establishment of the guarantee consortium for the capital increase, in which it is intended as a global and co-global coordinator Jp Morgan, Mediobanca , Santander, Credit Suisse, Deutsche Bank , Merrill Lynch and Citigroup.
Meanwhile, this morning Mps tries to bounce after the sales yesterday: at 9:25 the title salt by 3.6% 0,2518 euros per share.
No comments:
Post a Comment