Italian lender Monte dei Paschi di Siena (BMPS) has launched a €13.3 billion ($13.9 billion) all-share takeover for larger rival Mediobanca (MDIBY) in the latest turn in an evolving phase of consolidation among Italy’s banks.
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Monte dei Paschi (MPS), once among Italy’s most troubled banks until a 2017 bailout, will offer 23 of its shares for every 10 Mediobanca shares, implying a 5% premium to Thursday’s closing price. Shares in Mediobanca rallied 4% early in Milan, while BMPS fell over 7% on the news.
MPS Wants Domestic Champion
MPS, the world’s oldest bank, said the deal would create €700 million in pre-tax synergies , with the combined bank occupying the number three position after rivals UniCredit (UNCFF) and Intesa Sanpaolo (ISNPY).
“We aim for a new national champion, with two excellent brands that we want to protect and further enhance. A new, modern and highly competitive banking group, a leader in key specialist businesses with a strong capital position, ” said MPS CEO Luigi Lovaglio.
It comes at an important moment for the Italian banking sector as UniCredit embarks on its takeover of German lender Commerzbank (CRZBY), a move that has met with cool response from Berlin.
Commerzbank reiterated on Friday that it would not engage with its Italian rival, which has built a 28% in the German bank, until a specific proposal on a takeover is made.
Meanwhile UniCredit launched a bid for fellow Italian lender Banco BPM in November, thwarting attempts by the Italian government to join MPS with BPM.
Further complicating the picture, BPM has launched a bid for asset manager Anima, while Generali, in which Mediobanca is the largest shareholder, announced a tie-up with France’s Natixis this week to create an asset management giant.
Reprivatization of MPS Going Ahead
Since the bailout in 2017, the Italian government has been steadily reducing its stake in the lender, though it remains the largest shareholder.
The effort to reprivatize the bank saw it bring on board Delfin, the holding company of the billionaire Leonardo Del Vecchio, and Roman building magnate Francesco Gaetano Caltagirone. Delfin has raised its stake to 10%, while Caltagirone, whose son is on the MPS board, owns 5%.
Is BMPS a Good Stock to Buy?
BMPS has just one Buy rating in the last three months, implying an upside of 18%.
