Italian bank Monte dei Paschi di Siena said Friday that it was launching a bid for its larger rival Mediobanca, a potential 13.3 billion euro ($13.9 billion) deal that could help reshape the country’s banking sector.
The move — which a source close to Mediobanca said was hostile — comes amid a flurry of recent activity within Italy’s banks including potential mergers and acquisitions.
The world’s oldest bank, Monte dei Paschi (MPS) said the buyout offer for Mediobanca was valued at 15.992 euros per share, a premium of 5.03 percent over Thursday’s closing price.
Mediobanca shares jumped 5.1 percent to 16.075 euros at midday Friday on the Milan stock exchange, while shares of MPS dropped 8.1 percent to 6.408 euros.
MPS said its bid aimed “to create a new national champion in the Italian banking sector, with a number three position in key end markets”.
The deal would bring together MPS’s strength in its retail and commercial business with that of Mediobanca in private banking and wealth management.
It envisions 700 million euros in pre-tax synergies per year and aims at delivering “significant profitability levels”, MPS said in its statement.
It said the deal also had “strong logic for Italy, as the transaction will contribute to enhance the national competitiveness”.
The offer is expected to be completed by the third quarter.
A source close to Mediobanca told AFP that the bid was considered hostile, adding however that the bank’s top management was not surprised by MPS’s announcement.
A Mediobanca spokesperson declined to comment.
In a research note, analysts at Equita expressed “several doubts” about the proposed deal while warning of “potential dis-synergies”.
“The premium recognised is modest, also considering the probable reduction in speculative appeal” on MPS, they wrote.
– Former weak link –
MPS was bailed out by the Italian government in 2017, when it was on the verge of bankruptcy, and Rome became its main shareholder.
After the failure in October 2021 of its negotiations for a merger with Italy’s second-largest bank, UniCredit, MPS struggled to attract candidates for a takeover.
Long considered the weak link in the Italian banking sector, MPS has recently begun a clear recovery.
Delfin, the holding company of Italy’s Del Vecchio family, tripled its stake in MPS to 9.78 percent this month, becoming the second-largest stakeholder after the Italian state.
Construction magnate Francesco Gaetano Caltagirone has similarly raised his stake in MPS, from 3.5 percent to five percent, with Banco BPM, Italy’s third-largest bank, also holding five percent.
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