UniCredit’s starting proposal was for an all-stock deal that would merge two of Italy’s largest lenders, but offered just 6.657 euros for each share. Both Scholtz and Filippo Alloatti, senior credit analyst at Federated Hermes, said that UniCredit could sweeten the proposition by tacking on a cash component. “Remember, that’s the second attempt from Orcel to buy [Banco] BPM ... I don’t think there’ll be a third attempt. I think that either they close [the deal] now, or probably he walks. So I believe a cash component could be on the table,” Alloatti told CNBC. Orcel last month labeled Banco BPM as a “historical target” — stoking the flames of media reports that UniCredit had previously sought a domestic union back in 2022. The Italian stage was primed for M&A activity early last month, after Banco BPM acquired a 5% holding in Monte dei Paschi — the world’s oldest lender and another former takeover target of UniCredit, until talks collapsed in 2021 — when Rome sought to reduce its stake in the bailed-out bank. Critically, Scholtz noted, UniCredit’s offer “puts [Banco] BPM into a difficult position,” triggering a passivity rule that impedes it from any action that might hinder the bid without shareholder approval — and could stifle Banco BPM’s own early-November ambitions to acquire control of fund manager Anima Holding, which also owns a 4% stake in Monte dei Paschi. Offense-defense