Increased Offer for UBI shareholders: statement by CEO Carlo Messina

Intesa Sanpaolo has increased its offer to UBI Banca shareholders, adding a cash component to the share component of its Public Exchange Offer, announced on 17 February. The decision to enhance the offer follows the Antitrust Authority’s approval of the proposed combination a day earlier.

The CEO of Intesa Sanpaolo Carlo Messina stated that the decision to add a cash component rests on the Bank’s belief that a closer bond with all UBI shareholders will make the new entity stronger and more cohesive as it faces the complex environment brought on by the COVID-19 pandemic. It will also provide liquidity to the hard-hit regions in which UBI Banca’s shareholders and stakeholders are concentrated.

Messina said Intesa Sanpaolo remains committed to the combination’s main objectives in terms of profitability, dividends NPL reductions, and capital strength.

The offer runs to July 28 for all UBI shareholders.

“Our Voluntary Public Exchange Offer for all UBI Banca shares, announced in February, has aimed since its inception at establishing a new leader in sustainable and inclusive growth.

“We moved forward in the certainty that we could create benefits for all stakeholders: our shareholders, retail and business clients, employees, and the broader community and environment in which these two Groups operate. Certain also that we can succeed in the emerging European banking landscape of the decade ahead.

“The COVID-19 pandemic has led a profoundly more complex environment: on the one hand, it has given even greater strategic relevance to our project, while at the same time hitting hardest those territories in which UBI Banca’s shareholders and stakeholders are concentrated.

“True to our role as the engine of Italy’s real and social economies, we wanted to focus our attention on the difficulties faced by these communities.

“This is why, on the basis of updated analysis and having obtained all of the required approvals – from the ECB, Bank of Italy, stock market regulator Consob, Italy’s Antitrust Authority, and insurance regulator IVASS – we have decided to increase the Offer’s consideration, adding a cash component to the share component, inclusive of the premium.

“At a time of severe economic and social stress – particularly pronounced in UBI’s primary territories – Intesa Sanpaolo’s decision will make it possible to provide liquidity to UBI’s families, businesses, organizations and the charitable Foundations that are UBI shareholders. We are providing significant support to the communities we aim to embrace in this new banking Group, which we believe can strengthen the overall operation.

“Our decision rests on our belief that a closer bond with all UBI shareholders will make the new entity stronger and more cohesive, enabling it to better face the challenges ahead.

“Together, we will create a Group made stronger through its renewed bonds with:

Households, who through their savings are the foundation of future growth for the Bank and Italy's economy; they can count on our role as the leading bank in terms of social welfare programs aimed at reducing inequality;

Entrepreneurs, located in one of the areas with the greatest potential for growth, job creation, international competitiveness, a region that hosts a stable base of UBI shareholders and is part of that Bank’s history;

The Foundations of Cuneo and Pavia, backed by their stable, long-term endowments: they can join Intesa Sanpaolo’s historic shareholder Foundations, which have always been a notable competitive advantage for our Bank, while also becoming valued partners in our welfare, education, sustainability, innovation and art initiatives; in certain projects, the collaboration with UBI shareholder Dioceses will also be strengthened;

Institutional investors, whose solid support for Intesa Sanpaolo’s plans represents one of the pillars of our Group's leading position in European banking.

“Today’s decision fully respects Intesa Sanpaolo's profitability and capital strength, meaning we confirm all the project’s main delivery objectives:

• achieve a net profit of no less than €5 billion in 2022;
• distribute high and sustainable dividends to shareholders;
• accelerate the reduction of impaired loans at no cost to shareholders; and
• maintain capital strength, with a Common Equity ratio above 13% in 2021.

“We will create a sizable Group that, thanks to its roots in the territories in which it operates, will strengthen the Italian financial system and play a leading role in European banking”.