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Credit Agricole Raises Creval Bid to Win Investor Approval

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Tommaso Ebhardt and Sonia Sirletti
·3-min read
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(Bloomberg) -- Credit Agricole SA raised its bid for Italian lender Credito Valtellinese SpA by about 120 million euros ($144 million), indicating that the French bank is determined to win over investors who’d rejected its previous offer.

Credit Agricole boosted its offer to 12.20 euros a share from 10.50 euros, according to a statement late Wednesday. The new bid values Creval at about 856 million euros versus a previous bid of 737 million euros. Credit Agricole said that if it wins over investors holding 90% of the shares, it will pay an additional 0.30 euros a share.

Italy’s economic outlook has improved and growth estimates have been revised up, so “we have deemed it appropriate to increase our offer to generate benefits for all stakeholders,“ Giampiero Maioli, head of Credit Agricole Italy, said in a statement. “This is our final offer.“

In November, the Paris-based bank offered to buy Creval to build on its already extensive business in Italy and strengthen its position in the wealthy north of the country. Euro-area regulators are seeking to foster more merger and acquisition activity in the region, which is suffering from a fragmented banking market and the effects of long-term low interest rates.

“The new price Credit Agricole is paying gives a fair valuation for the bank’s shareholders and I believe it is sufficient to lure previously skeptical investors,” said Stefano Girola, a portfolio manager at Alicanto Capital SGR in Milan.

Wednesday’s sweetened offer followed requests by several shareholders, including the French tycoon Denis Dumont, Creval’s second-biggest investor, for a higher price. Investors with a combined control of almost a third of the shares had publicly opposed Credit Agricole’s offer as inadequate. Creval’s board has also said the initial offer was too low, while executives at the French bank had repeatedly said their offer was fair and that they didn’t intend to increase it.

While the initial offer represented a 21% premium on the last closing price, the shares subsequently have risen much higher. The stock closed at 12.34 euros in Milan on Wednesday before the revised bid was made.

Creval rose to 12.48 euros on Thursday trading as of 9:16 a.m. Credit Agricole declined 0.8% in Paris trading.

Credit Agricole’s businesses in the country include retail, corporate and investment banking. It has expanded with acquisitions in asset management and retail banking. A successful bid for Creval would double its market share in Lombardy, and consolidate its role as the sixth-biggest retail bank in Italy, with 3 million clients.

Ahead of the tender, the bank bought shares that take its holding to about 17%. The lender received 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.

The public offer is due to run through April 21.

(Updates with Credit Agricole Italy CEO comments in third paragraph.)

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