Italy's Unipol lifts Popolare Sondrio stake in bank-insurance push

MILAN (Reuters) -Italian financial group Unipol Gruppo, owner of the country's second-largest insurer, has more than doubled its stake in small lender Popolare di Sondrio (BPSO), in a move that could potentially drive consolidation in the sector.

Unipol spent 235.6 million euros ($248 million) to buy 10.2% of Lombardy-based BPSO at a 4% premium versus Wednesday's closing price, or a 10.5% premium over the last month's average.

Trading at 0.6 times its estimated tangible equity in 2024-2025, BPSO is some 15% more expensive than its closer peers, said Equita, which handled the purchase with Mediobanca.

BPSO shares rose 0.6% to 4.932 euros each on Thursday, below the 5.1 euros paid by Unipol.

Unipol, which is already the main shareholder in Italy's fourth-largest bank BPER, first invested in BPSO in 2021, tightening in this way their insurance partnership. It is also BPER's insurance partner.

Long seen as an attractive target, BPSO was the last large cooperative bank in Italy to ditch that status, which shielded it from potential takeovers, complying at last with a government reform after losing a court battle to stop it.

Unipol's stakebuilding has long stoked speculation of an eventual tie-up between the BPSO and BPER.

To build a wider network for his insurance products, Unipol chief Carlo Cimbri in 2020 drove BPER to buy 600 branches as part of bank Intesa Sanpaolo's takeover of rival UBI.

With a near 20% stake in BPER, Unipol supported the branch deal by buying into a 800 million euro capital raise.

The move aided the Intesa-UBI merger and propelled BPER onto a growth path by boosting its assets by 40%, after years-long attempts to clinch a merger with rival Banco BPM led nowhere.

While still busy integrating the branches, BPER last year bought troubled peer Carige with Unipol's backing.

Both Banco BPM and BPER are seen as potential candidates to merge with Monte dei Paschi which the state must re-privatise.

However, a dearth of interested buyers in the near term has pushed Rome to evaluate instead possible share placements to work towards re-privatisation commitments, pending a more permanent solution.

($1 = 0.9509 euros)

(Reporting by Gianluca Semeraro; Writing by Valentina ZaEditing by Ros Russell and Susan Fenton)