Mps and Unicredit, price tensions in Piazza Affari: drops and suspensions

• The market rejects the break in Siena.

  Mps -8%, Unicredit -2%

• Mps.

  Unicredit is called out, we talk about nationalization again

• Mps-Unicredit, negotiated with Mef towards the stop

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October 25, 2021Mps and Unicredit remain prey to volatility in Piazza Affari after the halt to merger talks, with both stocks currently frozen due to price tensions. Mps managed to reduce the falls to 5%, trading just above the euro per share, before being suspended again (-4.1% the theoretical decline). Unicredit recovered up to 11.4 euros (the stock had opened around 11.1 euros) before being frozen, with a theoretical decrease reduced to 1%.

The four subordinated bonds issued by Mps collapse, for a total value of € 1.75 billion. The securities sell between 13% and 19.4% on fears of a burden sharing in the event that Monte, in the absence of investors willing to subscribe to the increase with the State, should be secured with a precautionary recapitalization and not at market conditions. The bond of 750 million maturing in 2028 loses 16.8% and trades just over 60% of its nominal value, the one of 300 million maturing in 2029 falls by 13% to 84.5 from 400 million maturing in 2030 collapses by 19.4% to 63.4 and that from 300 million maturing in 2030 by 18.9% to 66.

After the Ministry of Economy and Unicredit announced the breakdown of the negotiations, MPS officially returns alone and the government must take action on several fronts. The first concerns Europe and the deadlines indicated by the Commission and the ECB. The second is the search for a new solution, a Plan B which is intertwined with the substantial but not unlimited resources of the 2022 Budget Law. It costs 4 billion to keep Mps standing without selling it.

In Siena they ask that the state remain a shareholder. From today the word returns to Tesoro and Palazzo Chigi. The presidents of the parliamentary finance committees, Marattin and D'Alfonso del Pd, ask the Minister of the Economy Franco to report immediately to the Chambers.

"For Siena, no short-term solutions seem to emerge. Banco Bpm's movements in the direction of Via XX Settembre have been reported - the Milanese bank denied meetings at the Mef -, but the hypothesis of an intervention on Siena is not considered viable due to size ". This is what

reports

. "One possibility could be Unipol. But more than in a Bper key - the article continues -, controlled by the Bolognese company, the interest of the managing director Carlo Cimbri could be in a possible direct role of Unipol itself in a bancassurance transaction ".

"Other options are not seen. At least among the national banks - the article continues - The situation is different if you look outside. Not only at Credit Agricole or Bnp Paribas, already well established. The BBVA, for example, which has as soon as its home banking platform was launched in Italy, it would not be disinterested. But the option of selling Mps to a foreign bank seems impractical, especially for the management of social repercussions. One of the unresolved issues on the table with Unicredit was related to about 8,000 redundancies in Siena ".

"It is an issue that must be addressed. I believe that it can be tackled by thinking of a third banking hub". Thus the president of Confindustria, Carlo Bonomi, comments on the breakdown of the negotiations between the Treasury and Unicredit on Mps, on the sidelines of the assembly of the Industrial Union of Turin. "I understand the needs of the Mef which must resolve the MPS situation, in this I hope that there will be a great discussion at national level for a third pole, also because in dealing with the Pnrr private investments will be the most important part. Having three poles very important banks, in my opinion, could also be useful to the business system "said Bonomi.

"More money for capitalization? We could talk about Alitalia, Mps, Ilva; we have some. It is obvious that today Mps is a problem and must be faced. We cannot ignore it, but let's face it once and for all and let's do it from a system perspective" he then added regarding a new recapitalization intervention by the Mef.