Unicredit might choose today who will be its counterpart in exclusive negotiations for the next 30 days as a potential buyer of a 50% stake in the capital of Pioneer Investments. The latter is a leading asset management firm wholly controlled by Unicredit which is valued more than 2.5 billion euros,
MF-Milano Finanza, writes today that today is the deadline the three bidders are expecting but a spokeman for Unicredit does not confirm and says that next Board of Directors is scheduled next September 23 and the issue is not on the agenda.
At the end of last July (see here a previous post by BeBeez) ceo Federico Ghizzoni, advised on the deal by Morgan Stanley and Bofa Merrill Lynch, arrived three proposals: the one from Spanish Banco Santander (advised by Ubs), the one by US private equity operator Advent International (supported by Goldman Sachs and Mediobanca) and the one by private equity operator CVC Capital Partners (advised by Deutsche Bank). CVC is allied in the deal with GIC -The Government of Singapore Investment Corporation, a sovereign fund of Singapore.
Santander would be interested in merging Pioneer with its asset management division, which would be rather more complex deal for Unicredit than making a partnership with a private equity operator like Advent of CVC. Moreover selling a 50% stake to CVC might be more attractive than selling to Advent as CVC has this partnership with GIC (70% CVC and 30% GIC), which might open many doors in Asia to develkop Pioneer’s business in that continent.
Last Wednesday September 10, the three bidders adjusted their bids to a higher price, MF-Milano FInanza writes today. Evaluations for Pioneer are about 9-10x the expected ebitda for 2014 that is 270 million euros or 11-12x the expected net profit of 240 millions, which means an enterprise value of 2.5-2.8 billions.
In its strategic plan for 2013-2018 published last March, Unicredit wrote that itas asset management division reached 173.9 billion euros in assets under management at the end of 2013 and that itsw target is to reach 263 billions at the end of the plan.
Unicredit acquired Pioneer in the Summer of year 2000, after a takeover bid launched on Pioneer’s shares at 43.5 dollars per share of the Nasdaq-listed group. Unicredit spent 1.2 billion dollars or 2.680 billion Italian lire (euros had still to be introduced in day by day transactions at that time), At that time Unicredit had an equivalent of 90 billion euros of assets under managmeent while Pioneer had around 30 billions.
In 2010 Unicredit opened a sale procedure for Pioneer but it closed it about one year after without coming to a sale. Bids came then from French asset managers Amundi (Crédit Agricole-SocGen) and Natixis, from British Resolution and from US Federated Investors, Northern Trust, State Street and Ameriprise Financial. Italian Government and Bank of Italy however said they were not quite happy with the idea that a foreign investor might buy a leading Italian asset manager which was one of the most active investors in Italian public debt so at the end Unicredit, after having tried to imaging a merger of Pioneer with Eurizon (the asset managment division of Intesa SanPaolo) decided to call back the sale procedure.