In a positive market for financial stocks, Mediobanca and Generali have filed a session on the rise. Piazzetta Cuccia gained 3.01% to EUR 6.34, while the subsidiary increased by 2.05% to EUR 11.96. A support prices, point out some operators, as well as the good performance on the stock market in the banking and insurance industry sector, they may have contributed to the press rumors about a possible French plan for the Lion outlet Trieste. The project, according to rumor, would see Vincent Bolloré deployed to significantly increase its weight in Mediobanca and, therefore, promote a merger between Generali and Axa.
“It’s a media fascination,” commented some sources close to the insurance group. However, on a purely financial level, it should be recognized that today the conditions for an assault on the Lion are certainly favorable. Especially if the offer was paper for paper. Just look at the stock market capitalisations of the two companies: Generali worth around 18 billion while Axa than 44 billion. Which means that, even assuming a 20-30% premium over current market prices, the effort of the transalpine company to win the Italian would certainly sustainable.
That said there are at least a couple of questions that merit response: Industrially the operation makes sense? The block of Italian shareholders that governs the General is ready to give way to the French group? The hypothesis of an interest of Axa for Generali is a theorem that is holding forth for years. As mentioned, at this stage, aided by the trend of Trieste title, the financial terms have become particularly attractive especially in the light of the work of restructuring the complex made by the company in previous years. However, it is a complex operation from a strategic point of view. The strengths of Generali points are mainly Italy and Germany with the first that surely is the key pillar around which the business. Conquering Lion, therefore, means significantly increase the exposure on the country with all that, for better or for worse, this involves. All the more so now that, as some analysts point out, there might also be a political risk associated with the upcoming constitutional referendum. At the same time, it is hard to imagine that Axa in the case, an operation can promote hostile, rather it should seek the shores of the historical shareholders today, but do not have a real majority bloc, however, count for more than 20% of capital. Those same shareholders (Mediobanca, Del Vecchio, Caltagirone, De Agostini, Benetton to name the main ones) would have no intention of leaving his grip on the company. From Mediobanca which also put into account the sale of a 3% of Generali, market conditions permitting. Among other things, a possible rise in Bolloré of Piazzetta Cuccia capital appears difficult to achieve. Today the financier has held 8% of the institute and is not allowed to rise above. If you wanted to increase its package would require modifications to the statute and, in any case, the Banking Act does not allow to go beyond the 10% of the bank. For it would then be very complex to detect the possible 8% that Unicredit has in its portfolio. Even so, it should be noted, do not understand why the bank should sell it now: the participation has a book value of 725 million euro, or approximately 9.7 euro per share (the expression of a specific analytical assessment each quarter is subject to adjustment) 6.3 against the euro to which Mediobanca is today. Unicredit thus divest mean cash in a round loss (has entered the 53% increase of the stock price).
In other words, if it really intends to conquer the Axa General can do so only with the agreement of the shareholders, that the state does not intend to give way. As to the possible inclination to Bolloré on Mediobanca, beyond the technical difficulties, the financial, given also the recent moves of Mediaset, does not seem to enjoy “the support” necessary, much less at the political level, in order to field a similar operation.
© ALL RIGHTS RESERVED
No comments:
Post a Comment