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UPDATE 1-Credit Agricole bid for Creval at 22.6% take-up with day to go

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MILAN, April 20 (Reuters) - Creval investors have tendered only 22.6% of the Italian bank’s shares targeted in a Credit Agricole Italia (CAI) buyout offer, leaving the outcome of the bid in doubt to its last day.

Italy’s fragmented banking sector is consolidating and CAI is ready to invest up to 877 million euros ($1.1 billion) to buy third-tier lender Creval to gain a stronger foothold in its biggest market outside France.

Creval has rejected the bid saying the price does not reflect its value and take-up was just 17.29% on Monday, with the bulk from stakes tendered by a Credit Agricole unit and investment fund Algebris, which has backed the bid all along.

After improving its offer last week, CAI is offering 12.20 euros per Creval share, up from an initial 10.50 euros.

CAI would further raise the price to 12.50 euros if its bid reached 90% of Creval’s capital.

Shares in Creval, which had been trading consistently above the bid’s initial price in a sign the market expected a sweetener, closed down 2.2% on Tuesday at 11.96 euros.

Take-up could improve on Wednesday if investors are waiting until the very last day to tender their shares.

However, the offer is conditional on reaching an acceptance threshold of at least 66.67%, which would hand CAI control of extraordinary shareholder resolutions, ensuring it can merge with Creval and maximise savings.

CAI has also reserved the right to waive the two-thirds threshold, and complete the offer with the acceptance of just 50% of Creval’s capital plus one share. ($1 = 0.8306 euros) (Reporting by Valentina Za and Andrea Mandala; Editing by Giulia Segreti and Alexander Smith)

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