Italy’s Bailed-Out Bank Launches $13.95 Billion Bid for Rival Mediobanca
Monte dei Paschi di Siena, the world’s oldest bank, has launched a 13.3 billion euro ($13.95 billion) all-share takeover offer for larger domestic peer Mediobanca. The proposed deal values Mediobanca’s stock at roughly 15.992 euros per share, a 5% premium to the close price of January 23. The offer will be subject to approval at a shareholder meeting on April 17.
Under the terms of the deal, Monte dei Paschi estimates pre-tax benefits of 700 million euros a year from the transaction, which would help leverage tax credits from previous losses and add an additional 500 million euros per year for the next six years. The lender plans to delist Mediobanca and hopes to close the transaction by the end of September.
Monte dei Paschi CEO Luigi Lovaglio described the proposal as “the best fit at the best time for a powerful business combination,” adding that the new Italian champion will be “resilient with a diversified business mix.”
The deal comes as Monte dei Paschi, which was bailed out by the Italian government in 2017, has turned its fortunes around under the leadership of UniCredit veteran Lovaglio. The Italian government still retains an 11.73% stake in the lender, while Delfin, the holding company of late billionaire Leonardo del Vecchio, holds 9.78% and Francesco Gaetano Caltagirone has a 5.03% stake.
The proposal could contribute to consolidation in Italy’s financial system, Italian banking union Fabi said. Monte dei Paschi was able to offer its first dividend in 13 years last year and posted a CET1 ratio of 18.3% in the third quarter.
The deal adds to a picture of increasing M&A appetite in Italy’s banking and financial services sector, with UniCredit’s offer to buy out Banco BPM and Banco BPM’s bid for fund manager Anima Holding.
