Elliott-backed Gardant closes long-awaited deal with Italy's BPER

MILAN, Jan 15 (Reuters) - Mid-sized Italian bank BPER Banca said it had finalised a deal with Gardant, more than a year after it first announced a partnership with the bad loan specialist backed by U.S. investment fund Elliott.

BPER and Gardant said in November 2022 they had agreed to set up a new company, which would be 70% owned by Gardant and 30% by BPER, to manage the bank's impaired loans. BPER had selected Gardant as preferred bidder in August 2022.

While the financial terms of the deal are not public, it entails a 150 million euro ($164 million) capital gain for BPER, which until now was the only major Italian bank to have kept its bad loan business fully in house.

Following the deal, Gardant will take on some 120 BPER staff specialised in recovering bad debts and retrain them to use their new company's technology.

Gardant has struck similar deals in the past with Genoa-based Carige and Milan-based Banco BPM. Carige in the meantime has been taken over by BPER.

Gardant's staff will top 450 following the transaction.

Back in 2022, Gardant trumped competitors to secure the BPER deal by teaming up with state-owned AMCO, which invested to buy 1.5 billion euros in problem loans from BPER as part of the deal.

The new company will manage those, as well as another 500 million euros in unlikely-to-pay (UTP) loans which were acquired by Elliott. UTP loans are not yet in default.

Under a 10-year servicing contract with BPER, the new joint-venture will take under management 90% of the bank's new bad loans and half of its UTP loans.

Rothschild was financial adviser to Gardant and Chiomenti its legal adviser. Banco BPM and UniCredit structured the acquisition financing for the deal. ($1 = 0.9136 euros) (Reporting by Valentina Za Editing by Keith Weir)