MILAN, Sept 9 (Reuters) - UBI Banca, Italy’s fifth biggest lender, will limit the amount of money that can be paid to shareholders who will oppose its conversion into a joint-stock company and will ask to cash out, documents on the bank’s website showed. UBI is one of 10 Italian cooperative lenders that will convert into joint-stock companies in line with a government reform that is expected to encourage a wave of mergers. In documents prepared for an Oct. 10 meeting at which shareholders will vote on the plan, UBI said it will set a limit on the exercise of exit rights, which have been priced at 7.288 euros per share, to protect its capital levels. UBI shares were trading at 7.12 euros by 1511 GMT. The limit is meant to ensure that UBI’s core capital level remains above a new capital requirement which is being set by the European Central Bank and has not been yet disclosed. It will also take into account an average of European banks’ latest available capital levels and will include a prudential capital buffer of 150 basis points. Based on current capital levels, the maximum amount that UBI would reimburse to dissenting shareholders would be 350 million euros ($391 million), although that figure can change, even significantly, once all the variables become known. ($1 = 0.8959 euros) (Reporting by Silvia Aloisi)
UBI Banca is taking steps to ensure its core capital level remains above the new capital requirement , in line with the upcoming European Central Bank 's ( ECB ) capital adequacy rules . At a meeting scheduled for 10th October , the bank will put forward a plan to limit the amount of money that can be paid to shareholders who will finance its conversion into a joint - stock company and will continue to cash out . This move is in line with the Italian 's government 's financial reforms , which is encouraging its banks to convert into joint - stock companies , in the hopes of encouraging a wave of mergers .