By Gianluca Semeraro and Valentina Za
MILAN (Reuters) - Italy's second-biggest bank Intesa Sanpaolo (MI:ISP) has secured around 60% of shares in rival UBI (MI:UBI) in its takeover bid, two sources close to the matter said, nearing a crucial control threshold after winning over a majority of investors.
Intesa sprung its bid in mid-February, just before COVID-19 contagion hit Italy, since when the two lenders have engaged in a bitter tit-for-tat over what would be one of Europe's biggest banking mergers since the global financial crisis.
A group of core UBI shareholders with 19% of the bank swung fully behind the offer, they said in a statement on Tuesday, having initially spurned it.
The CAR investor group, which comprises Italian business dynasties such as the Beretta family of gunmakers, had already begun to break ranks earlier this month when Intesa raised its terms by nearly a fifth.
Adding a cash sweetener to the previously all-paper offer, Intesa boosted the premium versus UBI's closing price on the day the deal was announced to 40% from 24%.
Breakaway CAR members had already tendered a combined 11% stake, the two sources said, adding the residual 8% stake would lift take-up above the majority threshold of 50% plus one share needed for the bid to be valid.
As of Monday take-up had stood at 43.5% of UBI's capital.
The two sources said British fund Silchester International Investors had also indicated it will accept the bid, pushing acceptances towards 60%. Silchester declined to comment.
LEADING INVESTORS
Silchester and Parvus Asset Management Europe, another UK-based fund, are UBI's two leading investors with stakes of 8.6% each, but have not officially disclosed their stance on the offer. Parvus also declined to comment.
Sources with knowledge of the bid have told Reuters the bank is confident of reaching the 66.67% threshold which will allow it to control extraordinary shareholder resolutions, so it can absorb UBI and maximise projected savings.
A high level of acceptances will also make it easier for Intesa to comply with an antitrust pledge to sell 532 branches of the combined group. An Intesa spokesman on Monday said the bank was certain of the bid's full success.
Institutional investors traditionally wait until the last day to tender their shares.
The bid was due to end on Tuesday but market regulator Consob has extended it to Thursday to protect shareholders after requesting clarification on communications UBI issued in relation to the offer, which the bank provided on Monday.
UBI, which said it had always acted in accordance with Consob's requests, has rejected the sweetened bid saying it still fails to reflect the bank's real value.
As the healthiest among Italy's second-tier banks rooted in the wealthy Lombardy region, UBI had been expected to play an active role in a long-awaited sector consolidation.