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UPDATE 2-UniCredit pulls plans to sell Pioneer unit
April 21, 2011 / 6:52 PM / 7 years ago

UPDATE 2-UniCredit pulls plans to sell Pioneer unit

* UniCredit to focus on organic growth for Pioneer

* Pioneer valued by Leonardo at around 3.5-4.0 bln euros

* UniCredit already launched 2 capital hikes (Rewrites, adds background)

By Stephen Jewkes

MILAN, April 21 (Reuters) - Italy’s biggest bank, UniCredit (CRDI.MI), has dropped the idea of selling its Pioneer asset management unit at a time when many banks are tapping the market to meet new Basel III capital requirements.

UniCredit has long been considering options for Pioneer, Italy’s second-biggest asset manager which investment bank Banca Leonardo valued at 3.5 billion euros ($5.10 billion) to 4 billion last year.

“UniCredit... has concluded that the best solution is for Pioneer Investments to focus on its organic growth,” the bank said in a statement on Thursday.

Italy’s biggest lender had received offers from French groups Amundi (CAGR.PA) and Natixis (CNAT.PA), British company Resolution RSL.L and had had talks with Intesa Sanpaolo (ISP.MI) over a possible tie-up with its fund manager Eurizon.

Earlier in April sources told Reuters the plan to sell Pioneer was dead in its tracks after UniCredit failed to conclude a tie-up with Intesa Sanpaolo’s Eurizon, the preferred option of the Italian government. [ID:nLDE7370QW]

The sources also said Unicredit was unhappy with offers it received from Resolution, Amundi and Natixis.

In March, UniCredit Chief Executive Federico Ghizzoni said the bank could restructure Pioneer itself if offers were not satisfactory. [ID:nLDE72M04U]

“The business is in much better shape than it was when the review process was launched,” UniCredit said in the statement on Thursday.

TIMING

The 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.

Domestic rival Intesa Sanpaolo is boosting its quality capital ratios to nearly 10 percent through a 5 billion euro capital increase.

Other Italian banks that have decided to raise capital include Banco Popolare BAPO.MI,UBI Banca (UBI.MI), Banca Monte dei Paschi di Siena (BMPS.MI), and Banca Popolare di Milano PMII.MI.

UniCredit, which had a core Tier 1 ratio end-2010 of 8.6 percent, has already launched two capital increases starting in 2008.

In an interview in Italy’s Il Sole 24 Ore, Ghizzoni said there was no need to ask for more capital from shareholders at this time but UniCredit would re-evalutate the situation at the end of the year. (Reporting by Stephen Jewkes, editing by Tim Dobbyn, Dave Zimmerman)

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