Banca Popolare di Lodi has lifted its offer for rival Italian bank, Antonveneta, offering cash and shares it said were worth €27.50 a share in response to the €26.50 that Dutch bank ABN Amro offered in an improved bid last week.

Lodi’s offer, which values Antonveneta at €7.9bn, remains heavily weighted towards stock, with more than 80 per cent of its bid in shares, versus a pure cash offer from ABN. But the Dutch bank’s shares rose as expectations grew that it would withdraw from what has been a long and difficult tilt at Antonveneta.

Lodi said in a statement that it would pay €4.90 in cash plus half of one its own new shares and 0.4 of a new share in Reti Bancarie, a retail bank it controls. Lodi said that each new Lodi share was worth €9.20 and each new Reti share €45 but that compared with traded prices of €7.83 and €38.75, respectively, on Wednesday.

Lodi said in its statement that it would make up any difference between its share price and the value of new shares in cash if the deal went ahead. It also said it would give a further €1 per share to investors who held onto the stock for 18 months after a deal.

ABN worried some investors last week when it lifted its bid to by €1.50 to €26.50 a share, hoping to give Lodi’s allies a cash offer they could not refuse. Lodi and its allies are presumed to control more than 50 per cent of Antonveneta, while ABN has about 21 per cent.

ABN had also extended its offer period from June 22 to July 6, in the hope that coming legal and regulatory rulings would be favourable to its bid. The bank is seeking to have Bank of Italy decisions to allow Lodi to buy up Antonveneta shares overruled, with a court hearing scheduled in Lazio on June 22.

The Bank of Italy’s policy has been to restrict foreign ownership of domestic banks.

ABN shares were up about 2.5 per cent to €19.75 on the news, while Antonveneta’s share’s rose 1.7 per cent to €27.16.

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