Monte dei Paschi Pushes Back Against Intesa’s Sweetened Bid
Intesa increased the cash component of its cash-and-stock offer to a total of€3.8 billion, up from €3 billion
Banca Monte dei Paschi BMPS 1.36%increase; up pointing triangle di Siena questioned Intesa Sanpaolo’s ISP 1.11%increase; up pointing triangle sweetened takeover bid after the suitor warned it could pull out if its target’s shareholders back alternative deals later this month.
Following an extraordinary board meeting Monday, Monte dei Paschi said the premium from Intesa’s bid remains below the average seen in comparable offers in the Italian banking sector.
Italy’s Intesa said Oct. 3 that it would increase the cash component of its cash-and-stock offer by 0.25 euros for each Monte dei Paschi share to a total of 3.8 billion euros ($4.24 billion), compared with 3 billion euros previously.
When added to the equity component of the bid, it would take the total offer value to 31.4 billion euros, based on Intesa’s share price at the time it launched the offer in June. Intesa’s original offer was valued at 30.6 billion euros.
On Monday, Monte dei Paschi’s board said the Intesa proposal still means its shareholders would be exposed to Intesa’s performance, as the proposed consideration remains mostly composed of shares.
Intesa’s offer prompted Monte dei Paschi—widely considered to be the world’s oldest bank still in operation—to launch in August its own takeover proposals for peers Banco BPM and Banca Generali, valued together at nearly $40 billion, in a bid to fend off its suitor.
Shareholders in Monte dei Paschi are scheduled to vote on the BPM and Banca Generali bids later this month. Intesa said it would pull its offer if Monte dei Paschi shareholders back the rival deals.
Monte dei Paschi said Intesa had asked its shareholders to abandon its alternative plan without any certainty that the proposed merger would unfold as expected.
“The board of directors and management will continue to act in the interests of the bank and all its shareholders by assessing and pursuing any initiative appropriate to protect and maximize the value of their investment,” Monte dei Paschi said.
Intesa didn’t immediately respond to a request for comment.