Banco Popolare SC is weighing selling stock at a discount of about 30 percent in a planned 1 billion-euro ($1.2 billion) rights offer, said a person with knowledge of the plan.
The bank’s board will meet Thursday to set a price for the stock sale, a key component of the lender’s plan to merge with Banca Popolare di Milano Scarl, said people familiar with the discussions, who asked not to be identified because the talks are private.
Verona-based Banco Popolare agreed to buy Popolare di Milano in an all-stock deal that will create Italy’s third-largest lender with 171 billion euros of assets. As part of the combination, Banco Popolare, needs to tap investors to comply with European Central Bank demands for bigger capital buffers.
At 30 percent, the discount to the so-called theoretical ex-rights price would be in line with what the bank set in its previous stock sale in 2014. The bank aims to begin selling shares on June 6, one person said.
A spokesman for Banco Popolare declined to comment.
Il Sole 24 Ore earlier reported the pricing discussions.