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Popolare Milano Sets 32% Discount on $694 Million Sale

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May 1 (Bloomberg) -- Banca Popolare di Milano Scrl, Italy’s oldest cooperative bank, will sell new shares at almost one-third less than the April 29 closing price in a 500 million-euro ($694 million) offer to boost capital.

Popolare di Milano, one of 15 Italian lenders included in the European Central Bank’s review of euro-zone banks, will sell shares at 43 euro cents each and offer nine for every 25 held, the Milan-based lender said in a statement late yesterday. The offer price is 32 percent less than the theoretical value of the shares, excluding the rights, according to the statement.

Chief Executive Officer Giuseppe Castagna is seeking to improve governance and cutting costs in a five-year plan to increase profit. The company is boosting capital in response to a request from regulators to strengthen finances before the ECB will become the euro area’s banking supervisor later this year.

Popolare di Milano’s investors can exercise rights to buy stock from May 5 to May 23, while the rights can be traded from May 5 to May 16, it said yesterday.

To contact the reporter on this story: Sonia Sirletti in Milan at ssirletti@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net Steve Bailey, Keith Campbell