Intesa stock price advances higher on a green light to complete a $4bln UBI takeover

Intesa stock price advances higher on a green light to complete a $4bln UBI takeover
  • The Italian antitrust regulator has given a permission to Intesa to complete the UBI takeover
  • After the first offer was rejected, Intesa submitted an improved offer
  • Intesa stock price is trading near the multi-month highs as the buyers look to extend the bullish run

Shares of Intesa Sanpaolo S.p.A. (MIL: ISP) have gained around 4% in the past few days after receiving a green light from the Italian antitrust regulator to complete the UBI takeover. Intesa stock price is now closing in on a new 4-month high.

Fundamental analysis: Intesa secures a green light 

Intesa said it has secured a permission from the Italian antitrust regulator for the takeover acquisition of rival UBI Banca for $4 billion.

The antitrust regulator said that Intesa’s pledge to offload over 500 branches was good enough to meet the concerns that the takeover would reinforce the bank’s position in local markets. 

“This is a fundamental milestone,” Carlo Messina, the Chief Executive of Intesa said in a note. 

“UBI shareholders now have all of the essential information needed to evaluate our offer and make their choice.”

To obtain the regulator’s permission, the bank agreed to offload exactly 532 branches to BPER Banca (MI: EMI) if the deal goes through, up from the original accord to sell 400-500 branches.

Intesa also pledged to sell additional 17 branches to another rival within 9 months if needed.  The antitrust didn’t reveal the deadline for the sales and said the bank has to be prepared to offload its own branches if it couldn’t dispose of UBI branches.

The bank had disclosed an all-paper exchange bid for the acquisition of its local rival to produce the seventh-largest banking group in the euro area. The offer was formally submitted on 6 July with the deadline set for 28 July.

Under the agreement, Intesa bid 1.7 new shares for each UBI share to the stakeholders.

The Bergamo-based banking group has refused the offer, stating that it doesn’t reflect its “fundamental value” and that the acquisition would turn Italy’s banking landscape into “an anomaly”. Intesa has made an improved offer in the meantime. 

Intesa initially submitted the €4.9bn offer to acquire UBI Banca in February. In June, the banking giant obtained the acquisition approval from the European Central Bank (ECB) for the acquisition.

Technical analysis: Shares continue to surge

Intesa stock price has continued to move higher in a sustainable fashion. The price action is trading in a continuous uptrend after posting a 4-month high on Thursday. If the latest offer is accepted by UBI’s board, we could see Intesa share price exploding much higher. 

Intesa stock daily chart (TradingView)

The buyers will be targeting a move to 1.95 next, where a confluence of horizontal resistance lines is located. On the downside, the horizontal support line at 1.75 will provide immediate support, if needed.

Summary

Shares of Intesa Sanpaolo have continued to gain as the banking giant works tirelessly to complete the takeover of its rival UBI Banca. Shares are trading near the multi-month highs as the buyers look to extend the uptrend to 1.95.

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