Italy to see some M&A, bank cap hikes – Banca IMI

By Danilo Masoni and Elisa Anzolin
MILAN (Reuters) – Investment banking in Italy will see selective mergers and acquisitions, bank capital hikes and a pick-up in corporate bonds in 2012, after activity slowed in the last six months, the head of investment banking at Intesa Sanpaolo unit Banca IMI said.
“Next year will not be very lively. There will not be an explosion of business but activity will be very selective and investment decisions well-researched,” Andrea Mayr told Reuters in an interview.
However low company valuations may create “a lot of opportunities for the more solid players,” he added.
Private equity funds may seek a way out of their investments before financing for a number of leveraged buy-out deals expires in 2013 and 2014, underpinning merger and acquisitions, he said.
Another factor supporting M&A could come from companies in financial trouble divesting non-core operations, he said.
Mayr said he expected capital increases mainly in the banking sector, as lenders comply with stricter European capital requirements.
“On the equity front there will certainly be a series of capital hike operations, particularly among banks in Europe and in Italy.”
Mayr also said it would be possible to see a recovery in corporate bond issues in 2012.
“The bulk will come from industrial groups. There are 70 billion euros (58 billion pounds) of corporate issues expiring in Europe which we think will be refinanced. New issues could bring the total issues to 100 billion euros,” he said.
Mayr said Banca IMI was quite active in operations where U.S. investors like pension funds buy a portion of the long-term debt of solid and diversified industrial companies.
(Editing by Mark Potter)

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