(Bloomberg) -- Banco BPM SpA rose to the highest in almost nine years as Credit Agricole SA moved to boost its stake in the lender that’s contending with an unsolicited takeover approach by UniCredit SpA. 

Banco BPM rose as much as 3.9%, after Credit Agricole said late last week that it entered into contracts allowing it to raise its holding to about 15%, from around 10%. The move, which came after UniCredit launched a surprise bid for Banco BPM, would give Chief Executive Officer Philippe Brassac a stronger position in potential negotiations with both firms, people familiar with the matter said.

The French lender is a major partner for Banco BPM in consumer credit and non-life insurance joint-ventures, and has been in its largest shareholder for some time. Credit Agricole’s asset management arm Amundi SA, meanwhile, relies on UniCredit for much of its sales in Italy. 

The “stake is the main bargaining chip to protect or even enhance Amundi’s distribution agreement with UniCredit,” Delphine Lee, an analyst at JPMorgan Chase & Co. wrote in a note on Monday, adding she sees a counterbid for Banco BPM as unlikely.

Shares of Banco BPM rose 2.1% at 9:54 a.m. in Milan, to the highest since January 2016, while UniCredit fell 0.9%. Credit Agricole rose 1.2% in Paris.

Brassac and UniCredit CEO Andrea Orcel have been trying to schedule a meeting in the next few weeks to discuss the Italian bank’s takeover bid, Bloomberg News has reported. An extension of Amundi’s contract and the sale of minority holdings in Banco BPM’s consumer credit unit Agos Ducato are expected to be part of the negotiations, some of the people said, asking not to be identified discussing private information.  

Representatives for Credit Agricole and Banco BPM declined to comment. Credit Agricole’s increased stake in BPM “changes nothing” for UniCredit, a spokesman for the Milan-based lender said in a LinkedIn post Saturday, adding that it remains prepared to negotiate with Credit Agricole. 

Still, the stakes now look even more significant for all the players involved. Upping its Banco BPM stake makes Credit Agricole the lender’s largest shareholder by far, while a successful bid for its Italian competitor would make UniCredit the country’s top bank by total assets, ahead of Intesa Sanpaolo SpA. 

The announcement of the offer for Banco BPM last month stunned many observers, not least because Orcel is already weighing an acquisition of Germany’s Commerzbank AG. Banco BPM’s board has initially rebuffed UniCredit’s proposal.

The bid could also get in the way of Italian government efforts to create another big domestic lender. Rome is monitoring developments and Prime Minister Giorgia Meloni has said she could move against the deal if she concludes it’s against the national interest. 

Her government gave informal approval to Credit Agricole’s plan to buy more shares in Banco BPM, Reuters reported Saturday.

Brassac put in calls to his counterparts at the two Italian lenders and to the Italian government to inform them his bank was boosting its stake, hours before the move was officially announced, the people familiar said.  

Separately, Banco BPM is considering asking Italian market regulator Consob for an exemption to the so-called passivity rule, which prevents companies targeted in takeovers from making strategic moves of their own, Il Sole 24 Ore reported. 

(Updates with analyst’s comment in fourth paragraph, context throughout.)

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