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(Updates with analyst’s comment in fourth paragraph, shares in last.)
May 20 (Bloomberg) -- Intesa Sanpaolo SpA will sell new shares at about one-fourth less than yesterday’s closing price in a 5 billion-euro ($7.1 billion) offer, as the lender strengthens finances before stricter capital rules are approved.
Intesa will sell stock at 1.369 euros each and offer 2 common shares for every 7 common or savings shares held, Italy’s second-biggest bank said in a statement yesterday. The price is 24 percent less than the theoretical value of the shares excluding the rights.
Investors including Compagnia di San Paolo, Fondazione Cassa di Risparmio di Padova e Rovigo, and Fondazione Cariplo, have already said that they will fully subscribe their rights for 24 percent of the offer.
“The stock will be ideally positioned to take full advantage of the cyclical upturn we expect in the Italian banking market,” Silvia Benzi, an analyst at Cheuvreux with a “strong buy” recommendation, wrote in a note today.
Intesa is boosting capital in response to a request from central bankers and policy makers seeking to avert a repeat of a global financial crisis. Chief Executive Officer Corrado Passera said April 6 that Intesa aims to increase the common equity ratio to 10 percent, to comply with “what is believed will become the ‘new normal’ for Basel III” capital rules.
Intesa’s investors can exercise rights to buy stock from May 23 to June 10, while the rights will be tradable from May 23 to June 3, it said yesterday.
Intesa fell 0.4 percent to 2 euros in Milan, giving the company a market value of 25.4 billion euros. The Bloomberg Banks and Financial Services Index, which was up 0.1 percent today, has declined 1 percent in the past six months, compared with Intesa’s 11 percent decline.
--With assistance from Chiara Remondini in Milan. Editors: Dan Liefgreen, Jerrold Colten
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