ROME (AP) - On Friday, Italian lender Monte dei Paschi di Siena made a significant announcement regarding its intention to reshape Italy's banking landscape. The bank revealed that it is launching a takeover bid valued at 13.3 billion euros (approximately $13.9 billion) for its rival, Mediobanca. This unexpected move could have far-reaching implications for the country's financial sector.
The proposed offer sets the valuation of Mediobanca's shares at 15.99 euros each, which represents a 5% premium over their closing price the previous Thursday. Currently, Monte Paschi has a market capitalization of about 9 billion euros, while Mediobanca's market value is around 12.7 billion euros.
According to the terms outlined in the offer, investors holding shares of Mediobanca would receive 23 shares of Monte Paschi for every 10 shares they own in Mediobanca. This exchange ratio indicates a strategic effort by Monte Paschi to attract Mediobanca shareholders to participate in the merger.
Monte Paschi further emphasized its expectations for the merger to yield approximately 700 million euros annually in pre-tax synergies. The bank expressed its commitment to achieving substantial profitability levels while maintaining a robust capital position post-acquisition.
The announcement of the buyout offer comes at a crucial time as the Italian government is actively seeking to re-privatize Monte Paschi. Since a bailout in 2017, the government has been the largest shareholder of the bank, and recent efforts have aimed to introduce new shareholders. Notably, in November, the holding company Delfin—founded by the late billionaire Leonardo Del Vecchio—and Roman tycoon Francesco Gaetano Caltagirone became significant new investors.
Delfin has substantially increased its stake in Monte Paschi, now owning just under 10%, while Caltagirone holds a 5% stake. Both investors are also major shareholders in Mediobanca, with their combined ownership nearing 30%. This cross-ownership raises questions about the dynamics between the two banks should the merger proceed.
Monte Paschi has undergone a successful transformation under the leadership of CEO Luigi Lovaglio over the past few years. This revitalization has made the bank a more attractive proposition for potential partnerships and investments. Additionally, the Italian Treasury, which has reduced its ownership in Monte Paschi from an initial 68% to 11.7%, is looking for new partners as it seeks to exit its controlling stake in the bank. This strategy follows UniCredit's decision to withdraw from a potential acquisition in 2021.
In conclusion, this merger proposal between Monte Paschi and Mediobanca represents a pivotal moment for the Italian banking sector, reflecting ongoing efforts towards consolidation and re-privatization. The potential deal is set to create significant market shifts and establish a formidable entity in the Italian banking landscape.
