BPM Considers IPO of Agos Arm, Moves Closer to Soured Loan Deal

(Bloomberg) -- Banco BPM is considering an IPO for Agos, its consumer-lending venture with France’s Credit Agricole, within the next two years and said it’s close to completing the sale of a huge bad-loan portfolio to investors.

BPM will maintain its 39 percent stake in Agos for now and will have the option of reducing that to no less than 10 percent if a listing goes ahead. Credit Agricole has given BPM, Italy’s third-largest bank, the option of acquiring 10 percent of Agos in June 2021 for 150 million euros ($170 million), according to a statement.

As a prelude to the possible listing, Agos will acquire ProFamily Spa, which sells consumer loans across BPM’s network, for 310 million euros.

BPM CEO Giuseppe Castagna will continue to assess three rival offers over the weekend as he mulls how to dispose the Italian bank’s bank’s “Project ACE” portfolio of soured debt. They are:

  • Elliott Capital Advisors’ Credito Fondiario SpA.
  • Christofferson Robb & Co. bid for the portfolio, with Davidson Kempner Capital Management and Prelios SpA vying for a servicing platform the bank will create.
  • Fortress Investment Management and Spaxs SpA bid for the portfolio, with DoBank SpA bidding for the platform.

The offers, which exclude an 800 million-euro leasing portfolio, cover loans totaling a nominal 7.8 billion euros.

The deal, one of the largest of its kind for an Italian bank, will help the lender reach next year’s return-on-equity target of 9 percent, according to Bloomberg Intelligence. And combined with the potential Agos sale, BI said it will go a long way to fixing the bank’s asset quality without hurting profit.

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