Melqart Joins Investors Rejecting Agricole Bid on Creval

Credito Valtellinese SpA shareholders with at least 20% of the bank are rejecting a takeover bid from Credit Agricole SA, throwing doubt on the lender’s claims that it can win over investors without increasing its offer.

London-based hedge fund Melqart Asset Management -- which owns 4.8% of the bank -- is the latest to say it doesn’t plan to tender its shares when Credit Agricole’s bid opens next week, according to founder and Chief Investment Officer Michel Massoud. Alta Global, Hosking Partners and Petrus Advisers, which own about another 15% of the Italian lender, are also against the bid.

Credit Agricole in November offered to buy Creval, as the bank is known, for about 737 million euros ($876 million), or 10.50 euros a share, through its Italian unit as consolidation accelerates. Since then, executives at the French bank have repeatedly said that the offer is fair and that they don’t intend to increase it, even as Creval shares gained past the bid value.

Creval shares reversed losses after Melqart’s comments on Tuesday and were up 0.2% as of 2:38 p.m.

Melqart Joins Investors Rejecting Agricole Bid on Creval

“The offered price is completely inadequate because it doesn’t reflect the resulting synergies, doesn’t include any premium for taking control of the bank and is even below Creval’s stand alone fair value,” Massoud said in a phone interview. “We think Credit Agricole has to substantially improve its offer.”

Credit Agricole’s bid, made through its Italian unit, would strengthen its position in the wealthy north of the country, doubling its market share in Lombardy, and consolidate its role as the sixth-biggest retail bank in Italy with 3 million customers.

Ahead of the tender, Credit Agricole bought shares that take its holding to about 17%. The lender got authorization to increase its stake to up to 20%, a move that narrows the gap toward the 50% plus 1 share threshold set by the bank to consider the bid successful.

Credit Agricole said late Monday that Italy’s market regulator approved the prospectus of the offer, which will start March 30 through April 21. The board of Creval is expected to meet before the offer starts to give its assessment.

The bank said it expects annual cost savings of about 50 million euros before taxes after the first three years, and additional revenues of 36 million euros after four years, according to the document filed Monday. The bank also estimates about 345 million euros of integration and restructuring costs.

“Since the offer was made, the world has changed with the Italian banking peers up about 25% and Credit Agricole’s share price even more,” Massoud said. Giampiero Maioli, CEO of Credit Agricole Italy, said on Feb. 25 that the offer is fair, echoing previous remarks made by the bank’s deputy CEO Xavier Musca.

The bid was 21.4% higher than Creval’s closing price on Nov. 20, the last trading day before Credit Agricole launched the bid.

“At the current level, we urge Creval’s board to strongly reject the offer and find strategic alternatives that can better value the bank,” said Massoud.

©2021 Bloomberg L.P.

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