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Only
about ten journalists took part in the Road Show for the presentation
of the Public offer for sale. In this case too, analysts and journalists
were convened separately. A little extra “dash” underscored the difference
between the two categories. The documentation was also kept separate
and that reserved for the “experts” - among whom sat Francesco Cossiga
- was not made available to the press. This unusual procedure somewhat
surprised those who have always and continue to consider Pier Domenico
Gallo - President and shareholder of the Institute - a manager sensitive
to upgrading his own and the company’s image. Meliorbanca was founded
in 1998 following the merger of Melioconsorzio - specialised in medium-term
loans - and Gallo & C., a consultancy firm engaged in Investment Banking.
Pier Domenico Gallo has called the bank a “merchant bank” providing
the “typical client” (businessperson or private individual with at least
2 billion lire to invest) with Investment Banking, Private Banking and
Corporate Banking services. After quotation, the target will be extended
to also include among clients, people with only 500 million lire to
entrust to Meliorbanca. For Gallo, the quality of a bank is measured
using a special “indicator”: the total “proceeds”. This “indicator”
is the parameter assigned to managers as a point of reference to achieve
profitability goals. This does not mean Meliorbanca’s ROE (in 1999:
12.82%) is far off levels of excellence at well above 20%. Considering
- as Gallo says - that the bank does not need to increase its net worth
and that the Directors expect a pay-out of around 60%, it is only natural
that the placing only involves shares put on sale by current shareholders
and not also a subscription of shares from capital increase. The motivation
provided on the Public offer for sale quite frankly appears - at least
to a large extent - more formal than substantial. The explanations given
for quotation on the Stock Exchange are in fact the following: exposure
with respect to enterprises and private individuals; element of management
attraction and incentive; possibility of exchanging shares. The first
of these points neglects the negative effects on image that could result
from quotation fluctuations, which are always possible. The second seems
to disregard that a stock-option plan can be implemented by unquoted
Companies. The third requires no quotation because it can be achieved
through various methods. A little money will bring home - as is only
right - Ferruccio Piantini - Vice-President of Meliorbanca - (selling
1,261,202 shares and keeping 631,947) and Vinicio Bon (selling 900,000
shares). The price will be set between a minimum of ITL 10,000 and a
maximum of ITL 14,174. The dividend for each share was ITL 260. Meliorbanca
has been called a “hen that lays golden eggs”. This likeness however
is not exactly adequate: it is a known fact that a glass egg breaks
easily and that all hens...end up in the pot.
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