Aurelia Butler

MILAN (Reuters) -UniCredit on Friday filed its buyout offer for rival Banco BPM with Italy’s market regulator, and CEO Andrea Orcel said the price was adequate.The filing makes the 10-billion-euro ($10.5 billion) all-share offer, which UniCredit announced on Nov. 25, binding and sets a price floor. UniCredit also applied to relevant authorities for regulatory approval.Shares in Banco BPM closed at 7.846 euros on Friday, well above the 6.657 euros a share UniCredit is offering based on the bid’s exchange ratio, indicating investors are betting on an improvement of the proposal.”We consider our initial offer to Banco BPM shareholders to be fair and appropriate,” Orcel said in a statement.Any deal must create shareholder value and be superior to the return from any UniCredit share buyback, he said. An M&A veteran, Orcel has said he wants any deal to return at least 15%.In announcing the bid for BPM, Orcel had signalled that UniCredit could consider topping it up with cash down the road.”We remain committed to our disciplined approach to all M&A, with any transaction having to prove a strategic fit and meeting, or exceeding, our core financial metrics,” he said.While BPM has long been a target for UniCredit, Orcel, who built his fortune as a bank merger adviser, resisted buying BPM until now in part because of the M&A premium built into BPM’s share price, sources previously told Reuters.Accelerating domestic consolidation forced his hand.Orcel said BPM investors would fare better holding UniCredit shares due to “its far greater resiliency and diversification going into a challenging year and two-times higher total distribution yield.”UniCredit is offering 175 newly issued shares for every 1,000 BPM shares, a premium of just 0.5% to BPM share price prior to the bid.UniCredit says the terms are a 15% premium to BPM’s share price before BPM bid for fund manager Anima Holding on Nov. 6, a move that triggered gains in the stocks of both Anima and BPM.”Given the robustness of our approach, (the) premium put forward and the situation remaining the same to that existing at the time of our original offer, we are moving forward at such terms”, Orcel said.UniCredit has also invited BPM’s biggest shareholder Credit Agricole (OTC:CRARY) (CA) to sit down for talks that are widely expected to focus on commercial partnerships.CA partners with both BPM and UniCredit. To strengthen its negotiating position, CA has applied to the ECB to reach a 19.99% holding in BPM and used derivatives to raise its BPM stake to 15% from just below 10%. “We are in continuous discussions with all relevant stakeholders,” Orcel said.($1 = 0.9528 euros) More

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ABUJA (Reuters) – Mali, Burkina Faso and Niger will have a six-month grace period after their scheduled exit from West Africa’s main political and economic group next month during which the ECOWAS bloc will try to persuade them to stay, the bloc’s leaders agreed on Sunday. The summit of the Economic Community of West African States (ECOWAS) was seen as a chance to address the impending withdrawal of the three countries on Jan. 29, a year after they jointly announced they would leave in a reversal of decades of regional integration.ECOWAS has so far failed in its goal to push them to reconsider, while the three countries in the insurgency-torn central Sahel region have set up their own alliance, sought ever-closer alignment in defence and other areas and mooted abandoning the West African currency union.While Jan. 29 remains the official withdrawal date, the effective date for their departure has been extended to July 29 – a transition period during which mediators from the bloc will seek “to bring the three member countries back to ECOWAS without prejudice,” commission president Oumar Touray said at the end of the summit. On Saturday, Mali, Niger and Burkina Faso reaffirmed their decision to leave as irreversible and jointly declared that their territories would remain visa-free for all ECOWAS citizens post-exit.This move could be an effort to address warnings that their departure threatens the bloc’s freedom of movement and its common market of 400 million people.Their withdrawal would cap a tumultuous period for the Sahel, where a string of coups since 2020 has swept military authorities to power who have fostered closer ties with Russia at the expense of former colonial ruler France, and other one-time allies from the region and elsewhere. More

PARIS (Reuters) -When veteran centrist Francois Bayrou, France’s new prime minister, was education minister in the 1990s, his plan to increase subsidies for private schools led to nationwide protests. He quickly caved in and would stay in the post for four more years.Three decades later, he will face a different force in the shape of a fractured and fractious parliament where one of his earliest tasks – as President Emmanuel Macron’s fourth prime minister of the year – will be to pass a budget for 2025.First, he must name a government which, like that of his predecessor Michel Barnier, will have minority support in parliament and be vulnerable to attack from far-right and left-wing opponents.The ouster of Barnier and his cabinet – the first time France’s parliament had voted to remove a government since 1962 – seemed to stun even those behind the move. For now, there is cross-party support for emergency legislation to ensure government funding does not dry up – but then the hard work on a budget for next year will begin. “The difficulties remain the same as under Michel Barnier,” Arnaud Benedetti, a professor at the Sorbonne university, told Reuters. “At least, a motion of no-confidence doesn’t seem likely in the very short-term.” A Macron aide said Bayrou was the “most consensual candidate able to bring people together.” Socialists said he represented more of the same. DEBT A ‘MORAL PROBLEM’A career politician, Bayrou, 73, was the torch-bearer of centrism until Macron reshaped the political landscape in 2017, dynamiting the traditional mainstream parties in a campaign Bayrou decisively rallied behind. Bayrou has in the past talked tough on the risks posed by France’s rising debt pile. He did so again on Friday, saying the country’s debt was a “moral problem” as much as a financial one. “I hear your warning on the seriousness of the situation and I agree,” he told Barnier.But he has placed a high value on keeping the peace, whether with the unions, lawmakers or the myriad of powerful vested interests in France. “I like to repair,” he told La Tribune Dimanche in his first interview over the weekend.Keeping the peace in a National Assembly dominated by three warring factions will be nigh-on impossible, however. Lawmakers’ pushback over the 2025 budget bill led to Barnier’s downfall and left-wing leaders say they may try to topple Bayrou should he also use special constitutional powers to ram through the budget without a vote in parliament.”Bringing onboard demands from opposition parties may be fiscally costly and the degree of fiscal consolidation may be limited next year as a result,” said JP Morgan’s Raphael Brun-Aguerre in a note. That was the same conclusion ratings agency Moody’s (NYSE:MCO) drew on Saturday, cutting France’s rating by one notch, saying the fall of Barnier’s government had reduced the chances of significant improvement in French public finances.FAR-RIGHT’S BUDGET RED LINES ENDURE Through the week Macron held talks with party chiefs spanning the centre-right Republicans to the Communists. He appealed to all ‘Republican forces’ to unite but opted to resist Socialist Party calls to appoint a premier from within their ranks, unwilling to risk unwinding reforms that liberalised the euro zone’s second-largest economy and placed the pension system on a more financially sound footing. Even so, the president’s 2023 pension reform will remain in his opponents’ crosshairs. “Our red lines remain,” Jordan Bardella, leader of the far-right National Rally told reporters shortly after Bayrou was named. Those red lines include indexing pensions to inflation throughout 2025.One opinion poll this week showed that 35%-38% of voters intended to support Bardella’s boss, Marine Le Pen, in the next presidential election due in 2027 – a level not seen before for the far-right leader and putting her in the lead.Furthermore, even if Bayrou’s political opponents do not get in the way, the challenges for his future government will be immense.It will need to reduce the budget deficit from a projected 6.1% for 2024 whilst keeping protest-prone trade unions at bay, increasing military spending for Ukraine and finding ways to support an ailing industrial sector. Barnier had promised to bring the deficit down with tax rises for the wealthy and for big companies, as well as a curbs on the planned rise in pension payments. But these measures fell by the wayside when his government was toppled.Former finance minister Bruno Le Maire, who has been grilled by lawmakers investigating his role in France’s failure to curb its deficit, gave a scathing indictment of parliament.”This assembly taxes, spends, censors,” he said. “It has long lost any sense of economic and budget realities.” More

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