By Valentina Za
MILAN, June 8 (Reuters) – Italy’s top banking group Intesa Sanpaolo made a €30.6 billion ($35 billion) unsolicited cash-and-share bid on Monday to buy smaller rival Monte dei Paschi di Siena (MPS) to create the euro zone’s second-largest lender.
A successful transaction, which would rank among the country’s biggest banking deals ever, would place Intesa behind Spain’s Santander in terms of market value, surpassing France’s BNP Paribas and domestic rival UniCredit, which is currently striving to grow its German business by buying Commerzbank.
Intesa CEO Carlo Messina said the offer, although not previously agreed, was friendly towards the MPS investors and he was confident of securing their support by the time the bid concludes in December.
Speaking in a call, he said that he was on good terms with the two principal investors, the Delfin holding and businessman Francesco Gaetano Caltagirone, and was offering a cash component precisely to win them over.
“We will reach the minimum (targeted threshold of 66.67%),” he told an analyst call on Monday. “We have very good relations with Delfin and Caltagirone.”
Intesa said its offer entailed a premium of 12.5% versus the closing share price of MPS on Friday, which gave MPS a market value of €27.4 billion.
Shares in MPS jumped more than 10% on Monday while those in Intesa lost 4%.
BPM’S PROPOSAL IS ‘A LOVE LETTER’
MPS, bailed out by the state in 2017 and reprivatised in 2023-2024, has been a focus of domestic bank mergers since becoming the main investor in insurer Generali last year, a coveted asset in Italian finance.
Intesa’s move sidelines Banco BPM, which has long been the leading candidate to merge with MPS. Amid mounting expectations of an Intesa bid, Banco BPM, Italy’s fourth-largest bank, said on Sunday it wanted to open talks with MPS about a potential merger.
Messina quipped that the BPM approach to MPS was a “love letter” as opposed to his concrete offer, adding the bid had not been prompted by BPM’s approach but rather the other way round.
Under Italian takeover rules, Intesa’s formal bid now prevents MPS from agreeing the terms of a deal with BPM without prior shareholder approval.
MPS has a scheduled board meeting later on Monday and the bank said it will not comment on Intesa or BPM until its board discusses the matter at the meeting.
UNIPOL DEAL
Intesa secured a fifth of the Italian banking market when it bought midsized UBI back in 2020, leapfrogging UniCredit to become Italy’s largest bank.
Citing antitrust limits, Intesa has kept out of a wave of mergers and acquisitions in Italy’s banking sector that began in November 2024, with Messina previously describing it as “the Wild West.”
To address competition issues, Intesa said on Monday it had struck a deal with insurer Unipol to sell a banking business comprising 635 MPS branches – roughly half the total – and MPS’ central offices in Siena, if its bid is successful.
Unipol is the main investor in smaller bank BPER Banca and an Intesa ally. It had played a similar role in the UBI deal, buying branches to help Intesa gain antitrust approval while supporting BPER’s expansion.
Unipol said it would pay up to €3.5 billion for the deal and combine it with BPER to create a bank that would operate under the name Banca Monte dei Paschi.
GENERALI STAKES
Intesa said the combined entity would have a market capitalisation of €126 billion and a net income goal of €16 billion in 2029, up from last year’s combined profits of €13.6 billion.
Messina said Intesa wanted to keep the 13% Generali stake which MPS gained when it acquired Mediobanca last year, but ruled out a takeover of the insurer.
Intesa had attempted to buy Generali in 2017, but dropped the plan and grew its insurance business internally.
Messina said a 3% Generali stake Intesa unveiled on Monday was necessary to defuse any defensive move from the insurer, which in 2017 took a stake in Intesa to thwart its approach thanks to Italian rules on cross-shareholdings.
Intesa said it would also retain Mediobanca, strengthening its wealth management and corporate investment banking activities.
Intesa’s move deals a potential blow to UniCredit, which last year built a large stake in Generali with CEO Andrea Orcel saying the bank “would observe” the situation.
($1 = 0.8667 euros)
(Reporting by Valentina Za in Milan and Gursimran Kaur in Bengaluru; Editing by Tom Hogue, Jamie Freed, Susan Fenton and Keith Weir)