UniCredit has retracted its bid for Banco BPM due to unmet conditions related to the golden power authorisation.

The board stated that the ongoing offer process has been hindered by the golden power provision, which was supported by BPM’s leadership.

This situation has restricted UniCredit’s ability to communicate effectively with BPM shareholders, according to the company.

The leadership at BPM has limited shareholder engagement during this period, which typically allows for discussions regarding the potential value of a merger and the terms that would be acceptable for progression.

Despite advancements made with TAR, the EU DG Comp, and the Italian Government, the timeline for a conclusive resolution regarding the golden power extends beyond the conclusion of UniCredit’s offer and the recent suspension imposed by CONSOB.

UniCredit chairman Pietro-Carlo Padoan said: “The UniCredit-Banco BPM tie-would have added massive value for all concerned.  The derailed offer process and continued uncertainty has made this situation untenable. Therefore today, we have withdrawn our offer.”

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In light of these circumstances, UniCredit has decided not to waive the golden power condition, which remains unfulfilled, leading to the withdrawal of its offer.

This decision has been characterised as a lost opportunity for BPM stakeholders and the broader Italian economy, stated UniCredit.

UniCredit noted that the consolidation of the Italian banking sector would yield benefits for both the nation and Europe.

The bank’s current priority is the implementation of its transformation strategy, which is reportedly exceeding expectations.

Mergers and acquisitions will be considered only if they serve to further enhance this strategy and contribute to value creation, said UniCredit.

UniCredit CEO Andrea Orcel said: “My primary responsibility is to act in the best interests of UniCredit and our shareholders.

“The continued uncertainty around the application of the Golden Power prescriptions do not benefit either. We have therefote made the decision to withdraw our offer.”

In April this year, UniCredit announced it cannot finalise its public exchange offer for Banco BPM due to conditions set by the Italian government.