Italy's UniCredit sounds out bidders for payments unit -sources

Siav SpA

20/05/2016 15:28

By Pamela Barbaglia 
    LONDON, May 20 (Reuters) - Italy's UniCredit  CRDI.MI , is 
carrying out a feasibility study of its payments processing 
operations which involves sounding out potential buyers, sources 
familiar with the matter said. 
    UniCredit, which is facing investor discontent over its weak 
share price, stretched capital position and low profitability, 
is reviewing options for its payments business following a spate 
of deals in Italy for similar operations, they told Reuters. 
    The Italian lender began contemplating a sale of the 
business last year, the sources said on Friday, adding that the 
process remains at an early stage.  
    If it were to go ahead with a sale, UniCredit would need to 
carve out payment processing into a standalone platform. 
    And a final decision is not expected until after UniCredit 
has resolved questions over the future of 60-year-old chief 
executive Federico Ghizzoni, who some top shareholders want 
replaced.  urn:newsml:reuters.com:*:nL5N18F3VU 
    The sources said UniCredit, which declined to comment, hopes 
to achieve a valuation similar to that rival Intesa SanPaolo 
 ISP.MI  got earlier this month when it sold its payments arm 
Setefi to a consortium of Advent, Bain Capital and Clessidra for 
1 billion euros on May 2.  urn:newsml:reuters.com:*:nI6N17N01O urn:newsml:reuters.com:*:nL5N17V2CW 
    With core earnings of about 40 million euros, UniCredit's 
payments business could be worth up to 500 million euros ($561 
million) depending on the synergies that prospective bidders 
would extract, one of the sources said. 
    Intesa's Setefi was valued at more than 10 times its core 
earnings after drawing interest from several private equity 
funds including London-based CVC and Permira, which lost out to 
the consortium led by Advent and Bain.  
    The same private equity firms tried last year to secure 
control of Italian payments specialist Istituto Centrale delle 
Banche Popolari (ICBPI), later acquired by Setefi's new owners 
in June in a 2.15 billion euro deal.  urn:newsml:reuters.com:*:nL5N0YI4PP  urn:newsml:reuters.com:*:nL5N0Z53NM 
     
    INFORMAL TALKS 
    UniCredit has recently held informal talks with parties who 
bid for Setefi to test their appetite, the sources said. 
    The bank held off selling the unit last year because of 
wider management uncertainties over shoring up capital. 
    Ghizzoni has repeatedly said the bank has no plans for a 
capital increase. 
    The Milanese bank, whose transitional CET 1 ratio stands at 
10.5 percent, against a minimum requirement of 10 percent set by 
the European Central Bank (ECB), is reviewing the sale of other 
assets to improve its capital position. 
    Reuters reported on Thursday that UniCredit was assessing 
the possibility of reducing some of its holdings, including 
trimming stakes in FinecoBank  FBK.MI , Turkey's Yapi Kredi 
 YKBNK.IS  and Poland's Bank Pekao  PEO.WA .  urn:newsml:reuters.com:*:nL5N18G6SH 
($1 = 0.8914 euros) 
 
 (Editing by Alexander Smith) 
 ((pamela.barbaglia@thomsonreuters.com;  +442075427723; Reuters 
Messaging: pamela.barbaglia.thomsonreuters.com@reuters.net)) 
 
Keywords: UNICREDIT PAYMENTS/M&A