Bob Diamond and Consortium Exploring Takeover of Two Italian Banks
July 14 2016 - 1:30PM
Dow Jones News
LONDON—Bob Diamond's private-equity firm Atlas Merchant Capital
LLC is part of a consortium of U.S. funds exploring ways to take
over two troubled Italian banks held by Italy's bank rescue fund
Atlante, people familiar with the matter said Thursday.
Atlas Merchant Capital, Warburg Pincus LLC, Baupost Group LLC
and Centerbridge Partners LP have held talks with fund officials
about buying and combining Banca Popolare di Vicenza SpA and Veneto
Banca SpA, the people said. No firm indication of interest is
expected until after the summer.
Atlante, managed by asset manager Quaestio Capital Management
SGR, was set up this year to buy bad loans from banks and to serve
as a backstop for banks raising fresh capital. Its investors
include banks, insurers, banking foundations and state-controlled
investment agency Cassa Depositi e Prestiti.
The Atlante fund took controlling stakes in Banca Popolare di
Vicenza and Veneto Banca worth around €2.5 billion ($2.77 billion)
after investors shunned recent share sales by the banks. Any
potential sale of the two banks to outside investors would likely
involve Atlante carving out and retaining bad loans, a person
involved in the talks said.
Italy's banking sector is in upheaval from high levels of bad
loans and poor profitability. The Italian government has been
studying ways to provide support but must avoid falling foul of
European Union rules on state aid. Bank analysts say consolidation
among the country's banks is inevitable and should eventually
improve returns for lenders as costs are stripped out.
As a private fund, Atlante shouldn't face any political hurdles
in selling the banks, the person involved in the talks said. If a
deal goes ahead it would be good for the Italy and "show that there
is a restructuring case that can be successful," this person
said.
Apart from relative newcomer Atlas Merchant, the U.S. funds
involved in the potential deal have all made significant
investments in European financial firms. Centerbridge bought
Italy's Banca Farmafactoring SpA last year, and is among potential
bidders for Portugal's Novo Banco. Warburg Pincus's European
financial assets include a stake in Banco Santander SA's Santander
Asset Management, while Baupost Group has invested in Portuguese
and Greek banks.
For Atlas Merchant, set up by Mr. Diamond after resigning as
Barclays PLC chief executive four years ago, the possible Italian
deal would be its largest to date. In April, Mr. Diamond said Atlas
Merchant was teaming up with Carlyle Group and other investors for
a possible purchase of part of Barclays Africa . His separate
venture, Atlas Mara Ltd., owns banks or bank stakes in seven
African countries.
Italian banking is seen as high risk by many analysts because of
its heavy load of bad loans and uncertainty around the scope for
bailouts. Yet U.S. funds and other global investors have been
scouring the sector for bargains, including buying discounted
portfolios of bad loans.
Giovanni Legorano in Milan contributed to this article.
Write to Margot Patrick at margot.patrick@wsj.com
(END) Dow Jones Newswires
July 14, 2016 13:15 ET (17:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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