To launch your proposal on Banco Bpm, Unicredit has opted for a Public Subscription Offer (Oops) for a value of 10.1 billion euros, an operation that is very different from aOpaor a Public Takeover Offer, which is read much more often in the newspapers. But what exactly is an Ops?
Public Subscription Offer, what it is and how it works
The Public Subscription Offer is an operation which consists in placing on the market a certain quantity of newly issued shares, bonds or other securities which confer voting rights. Regulated by law 149/1992, the Ops is generally managed with the intervention of a financial intermediary or a consortium of intermediaries (often banks), who use their network of customers to place the securities. These intermediaries also offer the guarantee of underwriting any part of the securities not placed by the end of the operation. The main objective of the Ops is to increase risk capital of the company without involving existing shareholders.
It is therefore a particular type of takeover bid, an operation that can be used to acquire control over a specific company, effectively liquidating the current shareholders, but the difference lies in the payment: in theOpa the consideration for the purchase of the securities is in money, while in theOops payment is made through the transfer of other equity securities.
In the case of the Ops, the shareholders of the target company receive shares of the offering party in exchange for the securities sold. If they decide to accept the offer, they will become shareholders of the offeror once the deal is concluded. The main advantage for the offeror in the Ops is that it is not necessary to make a financial investment in cash, since the payment takes place through the issuance of new shares.
The Ops in the Unicredit-Bpm case
In the case of the Unicredit-Banco Bpm operation, the exchange is established at 0.175 new Unicredit shares for each Banco Bpm stock. In practice, each Banco Bpm shareholder who accepts the offer will receive a consideration of 6.65 euros per share, with a premium of 0.5% compared to Friday’s closing value. The objective of the Unicredit Ops is to acquire the entire share capital of Banco Bpm, or at least a shareholding equal to 66.67%, as indicated among the conditions of effectiveness of the offer or, in any case, at least equal to 50% of the share capital plus one Piazza Meda share.
By opting for the Ops, Banco Bpm could obtain the advantages deriving from thecapital increase without requiring an outlay of money from its members. This operation, which is not hostile in nature but is aimed at consolidating the group at a European level, would allow the country’s second largest banking group to acquire the fifth largest operator in the sector.
