ROME — On Friday, Monte dei Paschi di Siena, the historic Italian bank, declared its intention to initiate a significant takeover bid for its larger competitor, Mediobanca, amounting to 13.3 billion euros (approximately $13.9 billion). This unexpected announcement could potentially transform the landscape of Italy’s banking industry.
The proposed offer suggests a valuation of Mediobanca shares at 15.99 euros each, representing a 5% premium based on their closing price from the previous Thursday. Currently, Monte dei Paschi has a market capitalization of around 9 billion euros, whereas Mediobanca’s market value stands at about 12.7 billion euros.
According to the details of the proposal, stakeholders in Mediobanca would receive 23 shares of Monte Paschi for every 10 shares they own in Mediobanca. Monte Paschi highlighted in its announcement that it anticipates the merger will result in 700 million euros annually in pre-tax synergies. The Tuscan bank emphasized that its objective is to achieve considerable profit levels while maintaining a robust capital position.
Following the release of the takeover news, Mediobanca’s stock climbed by 6.5% by 11 a.m. on Friday morning, in marked contrast to Monte Paschi’s shares, which dipped roughly 4%. This buyout offer occurs against the backdrop of the Italian government’s recent steps towards re-privatizing the historically troubled bank, which has been predominantly owned by the Treasury since an extensive bailout in 2017.
In November, new investors entered the scene, including Delfin, the holding company controlled by the family of the late billionaire Leonardo Del Vecchio, as well as businessman Francesco Gaetano Caltagirone. Delfin has increased its stake in Monte Paschi from its initial amount to just under 10%, while Caltagirone now owns 5%. Both Del Vecchio and Caltagirone are the most significant shareholders in Mediobanca, with their combined interests nearing 30%.
After enduring numerous financial difficulties and various restructuring attempts, Monte Paschi has undergone substantial reforms in recent years, guided by CEO Luigi Lovaglio. Meanwhile, the Italian Treasury has decreased its ownership of Monte Paschi from an initial 68% stake down to 11.7% while seeking new partnerships for the institution, especially after UniCredit retracted from a potential deal in 2021.
This unanticipated bid from Monte Paschi intensifies competition in the Italian banking sector, where numerous banks have recently put forth competing offers. The Italian government previously sought to merge Monte Paschi with Banco BPM to form a formidable entity capable of rivaling larger banks like Intesa Sanpaolo and UniCredit.
However, those ambitions were stymied by UniCredit’s focus on merging with its German counterpart, Commerzbank, coupled with a hostile takeover bid for Banco BPM launched in November. This shift in dynamics signifies a significant moment for the banking sector in Italy as institutions reposition themselves amid evolving market conditions.
