Volkswacht Bodensee - Italy's Monte dei Paschi bids 13.3 bn euros for Mediobanca

The surprise move comes amid a flurry of recent activity within Italy's banks including potential mergers and acquisitions.

Monte dei Paschi (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.

Italian news media quoted Mediobanca sources as calling the bid "hostile".

"It was not agreed," wrote the AGI news agency, quoting the sources, adding that a Mediobanca board meeting would be convened "in the next few days" to review the offer.

A Mediobanca spokesperson declined to comment when contacted by AFP.

Shares of MPS in Milan were down 6.77 at midmorning Friday to 6.50 euros per share, while Mediobanca shares were up 5.26 percent to 16.1 euros per share.

- 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.

These purchases had been seen as a prelude to the creation of a third banking group in Italy, formed by Banco BPM and MPS, to compete with Intesa Sanpaolo, the country's largest bank, and UniCredit.

But the public exchange offer launched by UniCredit on Banco BPM at the end of November thwarted this project, which was supported by the hard-right government of Prime Minister Giorgia Meloni.

C.Koch--VB