Parvus, who is (and what will) the Mercadante fund on Ops Intesa-Ubi

Parvus, who is (and what will) the Mercadante fund on Ops Intesa-Ubi

Numbers, words and (American) partners of the Italian-French financier Mercadante who with the Parvus fund as a shareholder of Ubi Banca (and also of Unicredit) can be the needle to decree the victory or defeat of Intesa Sanpaolo's Ops on Ubi

While the wait for the final verdict on the offer, which will arrive by the Antitrust by the end of July, grows, the rumors continue on what Ubi Banca's shareholders will do: will they say yes to the Ops launched on 17 February by Intesa Sanpaolo? How many will do it? Will Ca 'de Sass get the qualified majority of 66.7% or will it have to settle for 50% plus an action it has already said it will accept? And if so what will happen?

In the midst of all these questions – certainly not insignificant – in the last few days the spotlight has turned on a shareholder of Ubi, the London-based Parvus Asset Management fund, led by the Italian-French financier Edoardo Mercadante. Parvus has 8.6% of Ubi.

Meanwhile, by the end of this week, the green light of the Commission led by Paolo Savona is expected to publish the prospectus on the Ops which at that point could start in a few weeks so that "the word can pass to Ubi shareholders" as Intesa Sanpaolo CEO Carlo Messina said two days ago.


As we said, the experts for days have wondered if the role of Parvus will be anti Intesa Sanpaolo. In particular – as emerges from an article by Gianni Barbacetto del Fatto Quotidiano – to push Parvus with doubts and questions are the senator of the Five Star Movement, Elio Lannutti, and the entrepreneur and former MP of Giorgio Jannone, who also represents a committee of small shareholders of Ubi Banca founded the year of his farewell to politics. "The role of Parvus – the newspaper wrote in recent days – seemed made on purpose to block the extraordinary: assuming that the three agreements between Ubi members do not adhere to the Ops, for a total of about 27-28%, adding the 8% of Parvus reaches 34-35%. However, the ECB has changed the scenario: if Intesa stops between 50 and 66% of adhesions, the Ops will be valid, Ubi will end up under the control of Intesa even without a merger, and there will be a high risk that the the Bergamo institute, without the appeal of the Ops any more, lose a lot of value. A case of school that will surely be at the center of the reflections of institutional investors in the coming days ".


It should be noted that Jannone from Bergamo has always been very attentive to the fate of the Lombard credit institution: he was in fact the great accuser in the ongoing process against the top management of Ubi Banca, whose resignation he asked for and he was aiming for the presidency of the board years ago surveillance system.


In the current game Jannone took sides alongside Ca 'de Sass and, after the immediate "no" of the Shareholders' Committee (Car), which holds about 20% of the credit institution, the "yes" of the its Shareholders Association Ubi Banca. “Intesa Sanpaolo's Ops has undoubtedly led to objectively positive effects from the outset, with prospects of absolute importance – he said a few days after the launch of the Ops -. The positive opinion of the Supervisory Authorities and of the markets and the consequent appreciation of the security must be duly taken into consideration. We also consider positively the overcoming of a 'stand alone' industrial plan which we consider, in accordance with the declarations of the other shareholder combinations, to be completely unsatisfactory in terms of economic return ".


Once again, the entrepreneur – who left Cartiere Pigna – had thundered against Ubi's managing director, Victor Massiah: “After all, the performance of the Ubi share and the laughable dividends, of a few cents, distributed in previous years (moreover repeatedly ' drawn from the reserves), the small profits and even the losses achieved (€ 830,150,000 in 2016), the sanctioning findings of the Supervisory Authorities and the investigations of the Judiciary as well as the judgments of the rating agencies, raise many concerns ".


Meanwhile Mercadante came out of the closet and did so with an interview with the Reuters agency. Basically, he warned, Parvus Asset Management Europe will decide whether to say yes or not to Intesa Sanpaolo's offer only after the publication of the prospectus and based on the economic elements of the Ops. "We are waiting for the prospect to make a final decision on whether or not to comply with Intesa's offer, but we have no intention of communicating our decision," he said , explaining that "our assessment will be based purely on economic logic, we will make a evaluation of the intrinsic value of Intesa stand alone and the distribution of synergies and we will compare them with the intrinsic value of Ubi on a stand alone basis and we will decide ".


It should be remembered that Mercadante also has shares in Unicredit, which contrasts the Ops of Ca 'de Sass and which asked the Antitrust Authority to be heard in an anti-Understanding key in the preliminary investigation opened by the Authority on the operation in which the Guarantor recognizes several territorial and sectoral overlaps between Intesa and Ubi.


Mercadante threw water on the fire as regards press rumors about alleged relations between Parvus and some Bergamo and Brescia shareholders of the bank: "I have never had contact with other Ubi shareholders," he said adding that "since we have a position I have never met anyone on the bank who is a shareholder of Ubi or has relations with Ubi ".


The financier then spoke of his management company whose clients "are mostly American, typically are long-only investors such as universities or foundations. We have only one Italian client who has been with us since the company's creation in 2004 "he clarified, underlining that" we do not offer offshore services, contrary to what reported by the Italian press ".


Mercadante then confirmed that Consob asked for details on the transactions relating to the share in Ubi, promptly provided by the fund. According to calculations made by Reuters , at the current market prices the share in the Lombard credit institution is worth about 285 million or about 5% of the value of the assets under management. “We are a management company and we have taken a position on Italian banks because they trade at a discount. We have a stake in Ubi and UniCredit, for different reasons there are two industrial stories that interested us. " he highlighted.


The Parvus asset Management CEO, Edoardo Luigi Raphael Mercadante, is a financier born in Nice and has dual Italian and French nationality. Previously he worked for Merrill Lynch. Even insiders know little about him. And little is known about the fund, born in 2004, which does not operate in our country and therefore is not supervised by the Bank of Italy or by Consob. In our country, therefore, it operates more as a trustee than as a common fund. Parvus, which manages 5.4 billion assets, is among the largest 500 hedges in the world. It holds 8.6% of Ubi and is one of the bank's main shareholders along with Silchester International Investors, another British fund which also holds 8.6%. In Unicredit, on the other hand, the stake held is 2.7%.


Meanwhile, as reported by Il Sole 24 Ore today, the Milan Public Prosecutor has opened a fact-finding dossier, currently with no hypothesis of crime or investigated, which has the London fund Parvus Asset Management at its center. The suspect, reports the confindustrial newspaper, is that Parvus is linked to some of the large shareholders of Ubi Banca and that, consequently, it will take sides against Intesa Sanpaolo's offer. But – as mentioned – Mercadante yesterday in Reuters stressed: "I have never had contact with other Ubi shareholders."

This is a machine translation from Italian language of a post published on Start Magazine at the URL on Thu, 25 Jun 2020 13:50:03 +0000.