MILAN, Sept 16 (Askume) – Italian private bank Generali Banco (BGN.MI) said on Monday it would launch an all-cash takeover bid of 98 million euros ($109 million) for Milan-based lender Intermonte (INTM.MI) . The broker provides a private and direct service to Banco Generali’s clients.
Intermonte shares initially failed to take off in trading and closed 19.6% higher, a 21.9% premium to Banca Generali’s Friday close of 2.49 euros, while the bank’s shares were flat.
The deal highlights increasing competition in the wealth management industry, with players unable to compete on a large scale seeking market niches and specialist products.
Generali said the acquisition would allow it to bring in Intermonte’s stock and exchange-traded fund (ETF) trading business and derivatives business, and potentially design new products.
Intermonte’s investment banking capabilities will be useful to small business owners banking with Generali who need corporate advisory services in addition to wealth management.
Wealth managers such as Generali are concerned about the succession issues facing the myriad Italian companies that sprung up during the post-war boom.
Because founders wish to retire and are often unable to hand over family businesses to successors, they are ideal targets for financial firms that provide corporate and investment banking services and wealth management solutions.
Like rivals such as Banca Mediolanum (BMED.MI) and Fineco (FBK.MI) , Generali operates through a network of financial advisers and does not have proper branches. It manages €99 billion of assets on behalf of 355,000 clients.
The company offered 3.04 euros per Intermonte share, saying cost savings and expected revenue gains would be above Generali’s cost of capital, without giving further details.
Banca Generali, a unit of Italy’s biggest insurer Generali (GASI.MI), said Intermonte’s controlling shareholder, which owns 52% of its capital, had agreed to the offer.
Intermonte said separately that its board of directors would soon begin evaluating the acquisition.
UBS AG and the law firm Cappelli Riolo Calderaro Crisóstomo Del Din & Partners advised Banco Generali.
(1 USD = 0.9011 EUR)
