January 10, 2019 / 4:33 PM / in 9 days

Italy's UniCredit open to Carige deal if bankrolled by state: sources

MILAN (Reuters) - Italy’s biggest bank UniCredit (CRDI.MI) might consider buying Banca Carige (CRGI.MI) if such a deal came with state financial support, two sources close to the matter said on Thursday.

FILE PHOTO: Unicredit bank logo is seen in the old city centre of Siena, Italy June 29, 2017. REUTERS/Stefano Rellandini/File Photo

The government set up a 1.3 billion euro ($1.5 billion) fund this week to support Carige after the European Central Bank put it under temporary administration, following the bank’s failure to raise capital from investors.

The ECB has pushed Carige to seek a merger with a stronger rival and finding a buyer is now one of the tasks of the three commissioners appointed to run Italy’s tenth-largest bank.

UniCredit, led by Chief Executive Jean Pierre Mustier, has been sounded out several times by the regulators and Carige advisers over the Genoa-based lender but has so far turned down overtures, one of the sources said.

But the source added that UniCredit might be swayed if the state offered financial support with such a deal.

UniCredit declined to comment while Carige said it would say no more after comments made by its commissioners on Wednesday.

The heads of Italy’s two ruling coalition partners said on Wednesday the bank would be nationalized were public funds to be injected. Treasury Minister Giovanni Tria said he would prefer a market solution.

A second source also said UniCredit was likely to bow to pressure eventually. “Certainly Mustier will demand that any eventual deal be done on the same conditions as Intesa Sanpaolo’s acquisition of the Veneto banks,” the source said.

Intesa Sanpaolo, Italy’s biggest retail bank, took over the good assets of Veneto Banca and Popolare di Vicenza in 2017 for a symbolic price of one euro, securing 5 billion euros of public funding into the bargain.

($1 = 0.8683 euros)

Reporting by Gianluca Semeraro and Paola Arosio; Writing by Stephen Jewkes; Editing by Edmund Blair

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