UCG Unicredit Spa

By Noemie Bisserbe and Inti Landauro in Paris, and Giovanni Legorano in Rome 

UniCredit SpA has entered exclusive talks with Amundi SA about the sale of Pioneer Investments, in a deal that could deliver the Italian bank a special dividend of up to EUR800 million ($853 million) in addition to the sale proceeds, a person familiar with the matter said.

The Italian lender could sell the asset-management company--part of a strategic plan to bolster its capital base to meet strict, new regulations--for between EUR3.2 billion and EUR3.5 billion, the person said.

UniCredit could also receive a special dividend of EUR500 million to EUR800 million from Pioneer before the deal, the person added. The terms could still change.

Spokeswomen for UniCredit, Amundi and French bank Credit Agricole SA, which owns a 75% stake in Amundi, declined to comment on details of the possible deal.

Pioneer manages assets worth EUR225.8 billion across America, Europe, the Middle East and Asia, according to its website.

UniCredit is due to announce details of its plan to shore up its capital base on Dec. 13. Proposals may include a share sale worth about EUR13 billion, along with asset sales and cost cuts, according to people familiar with the matter.

But investors are fretting the government crisis in Italy, after voters on Sunday rejected proposed constitutional changes in a referendum, may complicate the bank's plans.

Since the beginning of the year Italian lenders have been battered by investor anxiety about the robustness of the country's banking system, which is struggling with bad loans and low profitability. The jitters have been compounded by fears the "no" vote in the referendum could unleash market instability. Italian banking stocks have fallen more than 50% since the start of the year, while European banks overall have fallen 10% over the same period.

UniCredit has sold a 30% stake in FinecoBank SpA and a 10% stake in Bank Pekao SA since the end of the second quarter. This has helped raise its common equity tier 1 ratio with fully applied Basel 3 rules--a commonly used measure of a bank's financial health--to 10.82%, from 10.33% at the end of the second quarter.

Mediobanca SpA is advising Amundi on the Pioneer deal, while J.P. Morgan Chase & Co. and Morgan Stanley are advising UniCredit.

Write to Noemie Bisserbe at noemie.bisserbe@wsj.com, Inti Landauro at inti.landauro@wsj.com and Giovanni Legorano at giovanni.legorano@wsj.com

(END) Dow Jones Newswires

December 05, 2016 10:54 ET (15:54 GMT)

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