UBI Banca’s board has unanimously rejected the €4.9bn takeover bid from the country’s largest lender, Intesa SanPaolo.

In a statement, UBI Banca said: “The offer does not provide for a cash consideration. Thus, UBI Banca Shareholders will bear the risks associated with achieving the Strategic Objectives indicated by Intesa.

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“The Consideration is based on a valuation of UBI Banca which does not reflect its true value and penalises UBI Banca Shareholders compared to the shareholders of ISP.

“UBI shares have significant potential to increase their value, considering, among other things, that UBI Banca’s standalone growth prospects as described by the targets shown in its updated business plan, the strength of its capitalisation, and its position as a major player capable of performing a key role in the consolidation of the Italian banking industry.”

7th largest euro zone bank: €1.1trn of assets

Intesa SanPaolo launched its hostile bid in February. If such a deal was concluded it would create the seventh-largest bank in the euro zone by assets.

The newly augmented Intesa SanPaolo would acquire an additional 3 million customers and have assets of around €1.1trn.

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To avoid antitrust concerns after the deal, Intesa planned to offload 400-500 branches of the merged group to BPER Banca and some insurance assets to UnipolSai Assicurazioni.

Intesa subsequently revised the terms of its offer to obtain regulatory approval. In particular, Intesa said that it would dispose of 532 branches from the combined Intesa/UBI to BPER Banca.

At the same time, UBI Banca has released an update business plan covering the period to 2022. The revised plan reduces UBI Banca’s profit forecasts but also pledges to increase the level of the bank’s dividend.

Headquartered in Bergamo, UBI Banca is the third largest bank in Italy with a market share of about 7%. It currently operates a branch network of about 1,566 outlets.