MILAN (Reuters) – Italian regional bank Creval said on Monday that a takeover bid from Crédit Agricole Italia (CAI) was a good strategic move, but the price should be at least 23% higher.

The Italian branch of Crédit Agricole announced in November that it would spend 737 million euros ($ 868 million) to expand its presence in the Italian consolidating banking sector – its largest market outside of France.

CAI is offering 10.50 euros per share to buy back the investors of Creval. But the Italian lender said a fair price would be between 12.95 and 22.7 euros per share, based on analyzes by advisers Bank of America and Mediobanca.

“CAI’s project has a solid strategic rationale, but it must take into account… that Creval has undergone a transformation. It’s a completely different and extremely strong bank, ”CEO Luigi Lovaglio told reporters.

Creval raised € 700 million in liquidity from investors in 2018 – eight times its market value – to finance a restructuring that reduced problematic loans and costs for a possible merger.

Lovaglio, who made a name for himself as the head of Bank Pekao, the former Polish unit of UniCredit, said the offer had to reflect a number of factors, including Creval’s high excess capital.

“Creval is extremely valuable, and those who know the bank know it. This is a rare opportunity and (if I was CAI) I would do my best to bring this house back – 10.5 euros is not enough, ”said Lovaglio when asked if he expected this. that the price be increased.

With its roots in the Valtellina region of Lombardy, Creval would double CAI’s market share in Italy’s richest region.

Creval shares have consistently traded above the bid price. At 9:42 a.m. GMT, the Creval share was up 0.7% to 12.10 euros.

The offer runs from Tuesday to April 21, following a green light from banking supervisors and the Italian market regulator Consob.

Creval estimates that the merged entity would benefit from a net increase of € 321 million in Italian rules aimed at stimulating business mergers in 2021. But CAI said last week it was unsure whether such incentives could be exploited.

Creval also said that CAI’s projected integration and restructuring costs of 345 million euros were too high compared to the average for recent bank mergers in Italy.

“There are no plans to cut jobs and we are happy about that, but we would also be happy to know how the money would be spent,” Lovaglio said.

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