BFF Bank Weighs Cerberus Stake Offer, Asset Sales Amid Regulatory Pressure

Italian lender BFF Bank SpA is reportedly weighing a proposal from U.S. investment firm Cerberus Capital Management for a minority stake, alongside offers from other financial institutions to acquire parts of its business. These considerations come as the bank seeks to strengthen its capital base under pressure from Italian regulators, according to a Bloomberg report citing people familiar with the matter.

Cerberus Proposes Capital Injection

Cerberus has submitted a non-binding offer to take a stake of less than 30% in BFF Bank through a capital increase estimated at approximately €300 million ($350 million). The proposal was reportedly among the options discussed by BFF's board on Thursday.

By keeping its potential holding below the 30% threshold, Cerberus would avoid triggering a mandatory takeover bid under Italian law. This structure would allow BFF to secure a significant capital injection while maintaining its independence.

Asset Divestiture Bids Emerge

In addition to the potential investment from Cerberus, BFF has received preliminary offers for several of its key business units from other Italian financial groups. These separate proposals indicate a multi-pronged approach to shoring up the bank's finances.

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Key offers under consideration include:

• BPER Banca SpA: Submitted a bid for BFF’s payments and depositary-bank business. The proposal reportedly implies a valuation for BFF as a whole that is close to its current market capitalization of nearly €600 million.
• AMCO: The state-backed asset manager presented a proposal for the bank's factoring operations.
• Sella Group: Separately expressed interest in acquiring BFF's payments business.

Regulatory Scrutiny Drives Action

BFF's exploration of these strategic options is a direct response to scrutiny from the Bank of Italy regarding its loan book and capital position. Earlier this year, the central bank required BFF to reassess its treatment of credit exposures and appointed two representatives to support the lender's board.

The regulator is pushing BFF to identify measures to fortify its capital, warning of a potential capital shortfall in 2028 if corrective actions are not taken. The current talks with Cerberus and other potential buyers represent the bank's effort to proactively address these regulatory concerns.