Fixed Income Analysis /

Sector Flash - Banks: Crédit Agricole shifting to second gear in Creval takeover

    Florian Hillenbrand
    Florian Hillenbrand

    CFA - Securitization

    15 April 2021
    Published by
    • Crédit Agricole SA (ACAFP Aa3s/A+n/A+n) raised its bid for the Italian lender Crédito Valtellinese SpA (CVALIM B2wp/NR/NR) from EUR 10.50 per share to at least EUR 12.20 per share. If Crédit Agricole wins over investors holding 90% of the shares, it will pay an additional 30 cents per share. The public offer is due to run through 21 April.
    • We continue to view the offer as clearly credit-positive for Credito Valtellinese and also slightly positive for Crédit Agricole. Furthermore, we general see the M&A momentum in the Italian banking sector as credit positive for the Italian banking sector as more concentration should support the profitability of the sector over the medium term.
    • In terms of trading, the updated news on the adjusted offer should not have much impact on either company’s debt since the fact as such has been priced in since the initial takeover communication in November 2020. From a total return perspective, we believe that it pays to take the risk to move into lower ranking positions of the capital structure of Credit Agricole.