Intesa prepares Monte dei Paschi bid to gatecrash BPM’s €50bn bank merger
Board of Italy’s largest bank meets hours after rival proposed potential tie-up with MPS
Intesa Sanpaolo is preparing a joint bid with BPER for Monte dei Paschi di Siena, just hours after rival Banco BPM wrote to MPS’s board to propose a €50bn tie-up to create a new “national champion” in Italian banking.
Under the proposal, BPER, Italy’s fifth-largest lender, would take MPS’s banking activities, while Intesa, the country’s largest bank, would take its recently acquired Mediobanca unit and, consequently, its 13 per cent stake in insurer Generali, according to five people with knowledge of the deliberations.
Intesa is at present holding a board meeting to agree the details of its joint bid with BPER, which may be formalised as early as Sunday night, according to three of the people.
Intesa and BPER did not respond to multiple comment requests. MPS said it was unaware of any putative bid from Intesa and BPER.
The three people familiar with the matter said that while the outcome of Sunday’s board meeting was uncertain, both Intesa and BPER had been running a rule over MPS in recent weeks.
An offer from Intesa and BPER would set up a direct contest with Banco BPM, which earlier on Sunday told MPS it was interested in exploring a combination.
Milan-based BPM said that its board had “unanimously approved” approaching MPS to express interest in “initiating discussions aimed at exploring and agreeing on a potential negotiated merger between the two institutions”.
BPM said that a merger with MPS, the world’s oldest bank, would “create a new national champion”.
Its planned tie-up would create a combined group with a stock market capitalisation of more than €50bn, BPM said, and could give the bank more strategic options, including over MPS’s potential sale of its stake in Generali.
BPM did not disclose the financial terms of its proposal. MPS said the bank had received BPM’s proposal and would evaluate it.
BPM had a market capitalisation of €20.3bn at Friday’s close in Milan, while MPS was valued at €27.3bn.
Italian officials told the FT the BPM bid was opposed by some quarters of the country’s establishment, and that the Italian government was likely to have some reservations because BPM’s single largest shareholder is France’s Crédit Agricole.
The French group would end up with indirect control over 13 per cent of Generali, a large investor in Italian bonds, the officials said; a position that Giorgia Meloni’s government does not view favourably.
Rome has previously voiced its opposition to a tie-up between the asset management arms of Generali and French group Natixis.
BPM’s proposal and Intesa’s rival plans are the latest efforts to consolidate Italy’s fragmented banks and come after MPS last year acquired Milan-based Mediobanca in a €17bn deal that sent shockwaves through the sector.
At the same time, the Italian government is pursuing its ambitions to help create a “third pillar” in the industry to challenge UniCredit and Intesa, the sector’s two heavyweights.
UniCredit, led by veteran dealmaker Andrea Orcel, last year abandoned a takeover bid for BPM following government opposition.
Other Italian lenders may also be interested in acquiring MPS, Italian media have recently reported.
Bankers in Milan said that MPS was clearly a target for rivals. Its business, including ownership of Mediobanca and its stake in Generali, makes it an attractive asset.
MPS’s swoop on Mediobanca, which was finalised last September, stunned the country’s banking establishment.
Mediobanca was long regarded as a symbol of northern Italian corporate influence and a national power broker, while the smaller Tuscan commercial lender had for decades been considered the problem child of Italian banking.
MPS was hit by a bitter boardroom feud in March after chief executive Luigi Lovaglio was ousted following disagreements with board members and Francesco Gaetano Caltagirone, a billionaire industrialist and large shareholder.
Shortly before his ousting, Lovaglio had secured unanimous board backing for his three-year business plan, including the merger and delisting of Milan-based Mediobanca. MPS shareholders voted in April to reinstate Lovaglio as chief executive.