Monte dei Paschi di Siena (MPS) has made a €13.3 billion takeover proposal for its larger competitor, Mediobanca, a development that could significantly impact Italy’s banking landscape. The announcement revealed a valuation for Mediobanca shares at €15.99 each, which is a 5% increase compared to their closing price the previous Thursday.
Currently, MPS has a market capitalization of approximately €9 billion, while Mediobanca’s equity stands at around €12.7 billion. This takeover attempt by MPS occurs during a pivotal moment for the Italian banking industry, characterized by numerous mergers and acquisitions aimed at restructuring the financial sector.
MPS anticipates that the merger could generate about €700 million in annual pre-tax synergies, emphasizing its goal to achieve significant profitability while maintaining a robust capital position. According to the proposal, Mediobanca shareholders would receive 23 new MPS shares for every 10 Mediobanca shares they possess.
The Italian government, which previously provided a bailout for MPS in 2017, remains its largest shareholder, although it has decreased its ownership over the past year as MPS shares have more than doubled in value under the leadership of Chief Executive Luigi Lovaglio. Recently, the government sold shares to Delfin, the investment company of the Del Vecchio family, and to Francesco Gaetano Caltagirone, a prominent construction magnate, whose son is now on MPS’s board. Delfin has increased its stake to nearly 10%, while Caltagirone holds a 5% share.
Both the Del Vecchios and Caltagirone are major shareholders in Mediobanca as well, with a combined ownership close to 30%, and have had long-standing disagreements with Mediobanca’s CEO, Alberto Nagel.
Previously, the Italian government had considered merging MPS with Banco BPM to establish a stronger domestic banking entity to compete with larger institutions like Intesa Sanpaolo and UniCredit. However, these plans were complicated when UniCredit launched a “hostile” takeover bid for Banco BPM in November, which BPM is currently trying to resist.
The turmoil is not limited to banking; it is also affecting Italy’s insurance and asset management sectors. Banco BPM is actively pursuing a takeover of local asset manager Anima. Meanwhile, Mediobanca, as the largest shareholder of insurer Generali, has announced a partnership with France’s Natixis to form a European asset management powerhouse, a decision that has faced criticism from the Italian government due to concerns about managing domestic savings abroad and the potential for capital flight.
photo credit: www.ft.com
