The sale of three small Italian banks, rescued in 2015, to bigger rival UBI has been delayed by at least a week at the request of the European Commission, three sources close to the matter have told Reuters.
The sale of Banca Etruria, Banca Marche and CariChieti to UBI, Italy’s fifth-largest lender, was expected to be finalised by the end of 2016.
These three banks and a fourth, CariFerrara, were rescued from bankruptcy in 2015 but Italy is now struggling to find buyers for them after rejecting bids from private equity funds over the summer.
UBI has expressed an interest in buying three of the lenders, but set conditions including for the banks’ new non-performing loans to be taken off their balance sheets and the option to use its own internal risk models to weigh the lenders’ assets.
Before the deal is concluded, the Commission has asked Italy’s resolution fund, which owns the banks, to ask the rejected bidders if they are still interested, the sources said.
“It’s a necessary step linked to legal issues and requested by Brussels to ensure a competitive process, also given the fact that UBI’s offer is worse than the old proposals,” one of the sources said.
The Commission and the ECB both declined to comment.
The objective is to find out whether any of the bidders might consider resubmitting their offer. Should one of them decide to re-enter the race, a new timeline would be set to conduct due diligence and present new offers.
The three binding bids received last year included offers from US investment funds Apollo Global Management and Lone Star, sources said at the time.
“If there is no response, the deal with UBI can be finalised pretty quickly. There are no major obstacles,” the first source said.
A second source added that a deal with UBI was already “taken for granted and could be finalised within days”.
In order to facilitate the sale to UBI, Italian bank bailout fund Atlante has presented an offer for two-thirds of the €3.7 billion of gross problematic loans of the three small banks, sources said last week.