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UPDATE 2-Italian nationalism halts Pioneer sale - sources

Published 04/08/2011, 06:57 AM
Updated 04/08/2011, 07:00 AM
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* Unicredit suspended sale - sources

* Italy not willing to sell to foreigners, bids too low

*UniCredit mulling options including keeping Pioneer

* Shares down, underperform sector

(Releads and adds detail from sources)

By Steve Jewkes and Victoria Howley

MILAN/LONDON, April 8 (Reuters) - UniCredit halted plans to sell its Pioneer asset management unit this week due in part to Italy's increasing reluctance to sanction foreign takeovers, three people familiar with the matter said.

Italy's biggest bank by market capital said on Friday it had not decided what to do with the unit after a newspaper reported it had pulled the disposal.

"We are in the time frame we set ourselves. We are evaluating various options including that of keeping Pioneer and relaunching it," a UniCredit spokeswoman said.

Several sources familiar with the matter told Reuters the deal was dead in its tracks after UniCredit did not manage to carry out a tie-up with Intesa Sanpaolo's fund manager Eurizon, the preferred option in Rome.

UniCredit decided to stop the sale about two days ago, after deciding that it would be "madness" to press ahead with a sale to a foreign buyer in the current political climate, one of the people said.

A second person added that Italian authorities' preference for Pioneer to combine with the asset manager of another Italian bank was "the final nail in the coffin".

"The deal is dead," added a senior Italian banker.

EU regulators are already "closely following" Italy's efforts to stop French dairy company Lactalis from taking control of Parmalat, Italy's biggest listed food group.

Italy's centre-right government backed "an Italian solution" for Parmalat after France's Lactalis became the biggest shareholder in the company.

Late last month, Italy approved a special decree allowing Parmalat to postpone its shareholders' meeting until June and authorised Economy Minister Giulio Tremonti to adopt measures to defend Italian companies from foreign takeovers.

BIDS TOO LOW

Unicredit was also unhappy with the offers that it received for Pioneer from British takeover vehicle Resolution and France's Amundi and Natixis, the sources said.

"Resolution was offering cash but the offer was not high enough and the share deals from the other two did not give a clear enough route to a full exit," the second person added.

A possible decision to pull the sale of Pioneer comes at a time when many banks are pushing through capital hikes to meet new Basel III capital requirements.

Germany's Commerzbank AG and Italy's Intesa Sanpaolo moved this week to raise 13.25 billion euros in capital

In Italy Banco Popolare completed a 2 billion euro capital increase in February while UBI Banca, the country's fifth-biggest lender, will tap the market for 1 billion euros. Banca Monte dei Paschi di Siena is set to unveil a capital hike of 2 billion euros, a source said.

Marcello Zanardo, analyst at Sanford Bernstein said Unicredit needed a cash offer with a high value to support capital and neither of these two things has happened because the bids were low.

"The jury is out on whether they need to raise more capital. The bar is rising on capital levels, so there is more pressure to raise capital." he said.

Italy's biggest bank by market value, UniCredit has said it has no immediate plans for a cash hike. "We have already done it, we don't want to do it again," UniCredit board member Piero Gnudi said on Thursday. (Additional reporting by Nigel Tutt and Lisa Jucca in Milan; Editing by Erica Billingham and Jon Loades-Carter)

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