Europe's biggest cross-border banking takeover kicked off on Friday with the launch of Italian bank UniCredito's 20 billion euro ($24.6 billion) all-share bid for Germany's HVB Group. UniCredito is offering five new shares for every HVB share, and is also buying HVB units Bank Austria and BPH of Poland. The Bank Austria bid is due to start on August 29.
While the deal is expected to go smoothly, most investors may wait until the October 10 deadline nears before tendering shares, following a pattern set in other German corporate take-overs in recent years. Nearly two-thirds of all acceptances on average came in during the last two days of the offer period.
"The likelihood is that the deal is going ahead and there are two easy choices: sell or take the conversion," said Rory Flynn, a fund manager at AGF International, which holds a stake in HVB.
"Taking the conversion appears to be reasonable value based on the way things are at the moment," he said, speaking before the prospectus was published on Friday.
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