Illimity Bank S.p.A. — M&A Activity 2025

May 16, 2025

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VOLUNTARY PUBLIC TENDER AND EXCHANGE OFFER LAUNCHED BY BANCA IFIS S.P.A. FOR ALL THE SHARES OF ILLIMITY BANK S.P.A.

THE ILLIMITY BANK'S BOARD OF DIRECTORS APPROVED THE ISSUER'S NOTICE REGARDING THE ASSESSMENT OF THE OFFER AND THE FAIRNESS OF THE CONSIDERATION OF THE VOLUNTARY PUBLIC TENDER AND EXCHANGE OFFER LAUNCHED BY BANCA IFIS FOR ALL ILLIMITY SHARES

Milan, 16 May 2025 - The Board of Directors of illimity Bank S.p.A. ("illimity" or the "Issuer"), which met yesterday night, approved unanimously the press release (the "Issuer's Notice") prepared pursuant to art. 103, paragraphs 3 and 3-bis of Legislative Decree no. 58/1998, as subsequently amended and supplemented, (the "TUF") and 39 of Consob Regulation no. 11971/1999, as subsequently amended and supplemented, (the "Issuers' Regulation"), relating to the voluntary public tender and exchange offer on all the shares of illimity, including the treasury shares of the Issuer, (the "Offer") launched by Banca IFIS S.p.A. (the "Offeror", or also "Banca Ifis") pursuant to and for the purposes of art. 102, paragraph 1, and 106, paragraph 4, of the TUF and the applicable implementing provisions of the Issuers' Regulation.

For the purposes of assessing the fairness of the Consideration, the Board of Directors examined: (i) the work carried out and the content of the Fairness Opinions issued by the Financial Advisors Jefferies and Wepartner (which will be attached to the Issuer's Notice), including the assumptions, qualifications and limitations reported by them for the purposes of applying the analytical models used; (ii) the information provided in the Offer Document, in the Exemption Document and, more generally, in the documentation relating to the Offer, as well as (iii) the elements more fully highlighted in the Issuer's Notice.

It should be noted that Banca Ifis has offered a Consideration determined for each Share Subject to the Offer in (i) no. 0.10 newly issued Banca Ifis Shares listed on Euronext Milan, STAR segment and (ii) Euro 1.414, which will be adjusted to Euro 1.506, following the detachment, on 19 May 2025, of the coupon relating to the balance of the dividend for the financial year 2024 which will be distributed by the Offeror as resolved by the Shareholders' Meeting of Banca Ifis on April 17, 2025.

The Board of Directors of illimity Bank S.p.A., after a careful assessment of the available documentation, also taking into account the risks and uncertainties highlighted by Banca Ifis S.p.A. in the documentation on the Offer, considering the fairness opinions received (and the assumptions, qualifications and limitations contained therein), deems it appropriate to bring some considerations to the attention of the Shareholders of illimity, as illustrated in Press Release 103, for the purposes of an overall evaluation of the Offer.

Difficulties in the complete evaluation of the Offer due to the limited information provided by the Offeror

1. Absence of a stand-alone business plan of the Offeror and details on the expected effects of the Transaction

The absence of a business plan of the Offeror and details on the expected effects (including pro forma) of the possible positive outcome of the Transaction, as well as detailed information on the prospects of Banca Ifis, as well as the absence of more information or useful data regarding the indication to develop new businesses (such as wealth management), does not allow a complete and well-informed assessment of the value of the Banca Ifis Shares offered in exchange, exposing illimity and its Shareholders to risks and uncertainties in relation to the evaluation of the Offer itself, in view of the lack of a concrete strategic perspective and the related financial, profitability and equity implications. This appears to be particularly significant, considering that the Banca Ifis Shares constitute the majority of the Consideration offered to illimity Shareholders.

2. Absence of exhaustive information in relation to the synergies expected by the Offeror

The absence of detailed information on the elements underlying the Offeror's estimates in relation to the expected synergies and the very limited disclosure on the ways in which the Offeror plans to generate any synergies exposes illimity's Shareholders to elements of uncertainty relating to the expected value of such synergies. Among other things, it is not clear whether part of the cost synergies envisaged by Banca Ifis may overlap with the rationalisation initiatives already envisaged by illimity's 2026-2028 Strategic Guidelines.

The possibility for the Offeror to achieve the intended synergies is conditioned upon the levels of acceptance of the Offer, as well as by the uncertainty of the subsequent Merger if the Offeror does not have the votes necessary for its approval. Furthermore, the realization of the envisaged synergies would be uncertain, both in terms of timing and magnitude, since, in the absence of a Merger, the legal and organizational separation, as well as the permanence of the admission to trading of the Issuer's Shares, could create substantial operational and managerial obstacles to the achievement of the announced synergies. This is all the more true if we consider the minimum threshold for acceptance of the non-waivable Offer of 45% plus one illimity Share, which further removes the possibility of resolving transactions within the competence of the extraordinary shareholders' meeting in the absence, in the event of acceptances close to the minimum threshold, of a stable majority at the shareholders' meeting.

Furthermore, the possibility of carrying out an integration such as the one envisaged by the Offeror presents a high degree of complexity and uncertainty, also taking into account the sector in which the Issuer operates.

All of the above limits the possibility of a complete assessment of any possible synergies, thus determining elements of uncertainty, in terms of both the expected value and the actual probability of their realization.

In addition, although the Transaction will allow illimity Shareholders who intend to tender the Offer to participate in future value creation to an extent equal to approximately 13.5% of future flows, this share, and consequently the premium paid by the Offeror, results in an inadequately balanced and unfavourable allocation of values for illimity Shareholders.

In fact, without prejudice to the undisturbed market values as of January 7, 2025 (the day prior to the announcement of the Offer), the premium paid by the Offeror to illimity's Shareholders is equal

to 5.8% compared to the average of the official prices of the illimity Share as of January 7, 2025, corresponding to approximately Euro 16 million; from this, it can be concluded that the Offeror is paying the Issuer's Shareholders a small part (approximately 6%) of the total value of any hypothetical synergies estimated at approximately Euro 280 million post-tax( 1 ) in addition to the future shareholding of approximately 13.5%.

Considering that illimity represents the true enabling factor of these synergies, the related value should be attributed to both shareholders, at least in equal parts; thus the share paid to illimity's shareholders does not appear to fully take into account the significant synergies expected from the Transaction.

3. Uncertainties about the Offeror's ICT strategies, technological developments and envisaged synergies

The technological architecture and the related operational model of the Offeror and the Issuer are not homogeneous. In addition, the Offeror's information on ICT strategies and technological assets and solutions following the possible implementation of the integration, which are highly characteristic and distinctive elements of illimity's history and business model, is lacking and lacks precise and detailed information.

As stated by the Offeror itself, the operational integration between Banca Ifis and illimity will require the execution of a migration process and potential transformation of the information systems of significant complexity, with the risk of delays in the execution of the integration process itself or operational malfunctions, with a potential request for additional resources for the implementation of the entity resulting from the possible Transaction.

The foregoing circumstances appear to be relevant, limiting the possibility of a complete assessment of integration costs, possible synergies and potential risks and, consequently, determine elements of uncertainty relating both to the expected value of such synergies and to their actual probability of realisation.

4. Uncertainty about the potential employment impacts of the takeover bid

The Board of Directors notes that the Offeror has not provided detailed information either on the possible effects of the Transaction on employment (and this, despite the significant amounts of the synergies envisaged, as described in the Offer Document and referred to in this Issuer's Notice), or in relation to the location of the offices, offices and working methods; therefore, the Board of Directors is not in a position to carry out its own independent and full assessment of the future impact of the possible success of the Takeover Bid on the employment levels of illimity or the combined entity.

Information relevant to the assessment of the Offer

5. Different business model (including factoring, corporate banking and direct investments in NPLs) between the Offeror and the Issuer

⁽ 1 ) The amount represents the algebraic sum of the following components: (i) estimate of the net present value of the synergies, as of May 12, 2025 at an illustrative discount rate of 12.5%, based on the synergies envisaged by Banca Ifis in the Offer Document (Euro 75 million before taxes, of which 50% achievable starting from 2026 and 100% starting from 2027); (ii) integration costs, as declared by Banca Ifis in the Offer Document, amounting to Euro 110 million before tax. It should be noted that the net present value of synergies relating to the years after 2027 is calculated using a perpetual annuity and that the tax rate has been assumed to be 33.1%.

The Issuer and the Offeror, although seemingly characterized by elements of complementarity, have non-homogeneous business and management models, taking into account operating approaches, technological solutions and commercial and credit practices.

In particular, in factoring, the Offeror is characterized by large volumes and a focus on small companies, while the Issuer is focused on medium-sized companies, large unit volumes and the centrality of the relationship with the customer. These differences could limit the scope for developing synergies, in particular deriving from the assumed increase in productivity per customer, at least with respect to some of illimity's current factoring customers. With reference to corporate banking, for the Issuer, for example, the role of Tutors - which represents a unique feature in the Italian banking sector - is central in the credit analysis process of the clients. Therefore, the proposed homogenisation of commercial, credit and lending policies should take into proper account such peculiarities and differences.

In addition, the Issuer has undertaken a strategic repositioning that envisages the exit from the market of direct investments in NPLs and the focus on market segments considered more stable and promising, such as credit to SMEs in the performing sector, restructuring, relaunch and investment banking and asset management services. Banca Ifis, on the other hand, is significantly exposed to different types of NPLs, which contribute, based on the first quarter of 2025, for about 50% to the net profit of the banking institution.

Such differences could lead to operational integration challenges, limiting potential commercial synergies, as well as internal misalignment with the potential consequent loss of key talents and expertise.

6. The Offeror's capital position depends on the level of acceptance of the Offer

As represented by the Offeror, in the event of a minimum acceptance of the Offer (45% plus one illimity Share), the impacts on Banca Ifis' consolidated pro-forma Common Equity Tier 1 Ratio, mainly deriving from the presence of minorities, would bring the Common Equity Tier 1 Ratio below 14%( 2 ). This entails uncertainties or risks about the level of capital of the new banking group and the ability of the Offeror to ensure the development of the new group and/or to support shareholder remuneration.

7. Transition from a public company to a reality with concentrated control, further reinforced by the increased voting rights provided for in the bylaws

The ownership structure of the Issuer and the Offeror is substantially different as the Issuer is a public company (characterized by a widespread shareholding structure and the absence of a controlling or reference shareholder); the Offeror, on the other hand, presents a controlling shareholder, who would continue to maintain control even in the event of completion of the Offer; in addition, the Offeror's bylaws provide (from November 2024) for the increase in voting rights (two votes for each share) in favour of holders of Banca Ifis Shares for a continuous period of at least 24 months. The implementation of the Offer would therefore determine, for illimity's Shareholders, the transition from a public company to a company characterized by control concentrated in the hands of a single shareholder and this would have to be assessed by the Shareholders also in

⁽ 2 ) Impact estimated by the Offeror at -225 basis points in the event of a level of acceptance of the Offer equal to 45% plus one illimity share on the basis of a consolidated Common Equity Tier 1 ratio of the Banca Ifis banking group of 16.10% as at 31 December 2024 (Offer Document, Section B, Paragraph B.1.11).

terms of the contestability of the company in which they would participate.

On the basis of the Offeror's indications in the Offer Document, in Section G, Paragraph G.2.1 ("Reasons for the Offer and the Offeror's future plans relating to the Issuer"), the Board of Directors of the Issuer acknowledges that the integration of the two entities, should it take place despite the risk and uncertainty profiles highlighted in this document, could have effects on illimity's business, such as, for example, the consequent reduction of the relative risk profile of the Issuer's assets (also with reference to non-core assets), a potential improvement in funding and funding mix and a possible greater capital base also to reduce strategic risk.

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The Board of Directors also draws attention to the execution risk of the Issuer's 2026-2028 Strategic Guidelines, which provide for the development of the business also achieved through initiatives to dispose of non-strategic shareholdings, the reduction of non-core assets and rationalization, in light of a 2025 shaping up to be a year of transition and realignment, in which the foundations will be laid for the future development of the business under a stand-alone scenario built regardless of the Banca Ifis Offer.

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The Board of Directors, on the basis of the documentation reviewed and taking into account the statements expressed by the financial advisors Jefferies and Wepartner in their fairness opinions, whose financial methodologies, assumptions, qualifications and limitations contained therein have been assessed and shared, has concluded that the Consideration is fair from a purely financial point of view.

For the purposes of a comprehensive and complete assessment of the Offer, the aforementioned evaluation must be read in conjunction with the considerations on the Offer made by the Board of Directors, which highlight risks and uncertainties related to information gaps, expected synergies, the differing business models of the Issuer and the Offeror, the execution risk of the Transaction and the level of capital of the new banking group, as illustrated above.

The Board deemed it important to emphasise these elements because, even in view of the results of the analyses carried out solely from a financial point of view, the risks and uncertainties highlighted make it difficult to carry out an assessment of the Offer, as they relate to aspects that are essential for the complete appreciation of the Offer itself.

The Issuer's Notice – to which reference is recommended for exhaustive information and an illustration of the assessments made by the Board of Directors regarding the Offer, the related consideration and any data useful for the appreciation of the same – will be made available, inter alia, on illimity's website, at https://www.illimity.com/en/investor-relations/opas-banca-ifis.

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In any case, it is also recommended a full reading of the Offer Document and the Exemption Document published by the Offeror.

Capitalized terms in this Release, unless otherwise defined, have the meanings given to them in the Issuer's Notice.

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For additional information:

Investor Relations & Sustainability

Fabio Pelati +39 335 7853370 – fabio.pelati@illimity.com

Ufficio Stampa & Comunicazione illimity

Vittoria La Porta, Elena Massei press@illimity.com

Ad Hoc Communication Advisors Valentina Zanotto +39 335 141 5575 Riccardo Schiavon +39 340 082 3015 illimity@ahca.it

illimity is the banking group led by Corrado Passera, specialising in offering performing loans to SMEs, restructuring, turnarounds, and investment banking services. illimity covers the entire value chain in credit management, from financing activities to asset management and structuring through ARECneprix. illimity SGR also forms part of the Group, which establishes and manages alternative investment funds to support institutions and companies, both in the UTP space and in private capital. The story of the illimity Group began in January 2018 with the launch of the Special Purpose Acquisition Company SPAXS S.p.A., which closed a record capital market funding of EUR 600 million. SPAXS subsequently acquired Banca Interprovinciale S.p.A. and the merger of the two companies formally created 'illimity Bank S.p.A.' which has been listed on Borsa Italiana S.p.A. (ticker 'ILTY') since 5 March 2019, first on the MTA and on the STAR segment since September 2020.

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