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(Bloomberg) -- Mediobanca SpA has rejected Banca Monte dei Paschi di Siena SpA’s takeover bid, turning the unsolicited approach into a hostile one.
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The takeover offer presented by Monte Paschi last week “is devoid of industrial and financial rationale and is therefore destructive for Mediobanca,” its board of directors said in a statement on Tuesday. The bid is “contrary to the interests,” of the lender, it said.
Bloomberg News previously reported that Mediobanca under Chief Executive Officer Alberto Nagel considers the offer as hostile.
Monte Paschi’s last Friday stunned investors with an all-share offer to acquire the rival at an implied premium of about 5% on the closing prices the previous day. The new entity would rank “among the top three institutions” in Italy by assets, Monte Paschi said in the statement.
The deal proposed by Monte Paschi “has no industrial value” as it would weaken Mediobanca’s focus on wealth management and investment banking, the lender said in the statement on Tuesday. A combination would lead to “an immediate loss” of clients and probably trigger the departures of some of the bank’s “best staff.”
Monte Paschi said Friday the deal would seek to “deliver significant profitability levels.” It would also result in about €300 million in annual cost savings as well as positive sales effects, it said.
Mediobanca cast doubt on the savings anticipated by Monte Paschi. The deal would have “a lack of appreciable cost synergies, as there is no overlap between the two groups’ distribution networks,” it said.
Perfectly Healed
Italy’s government, which still owns part of Monte Paschi, has signaled support of the lender’s approach.
Paschi is “perfectly healed” and able to embark on ambitious moves, Prime Minister Giorgia Meloni said on Saturday.
Monte Paschi’s shareholders include two billionaire investors, the Del Vecchios and Francesco Gaetano Caltagirone. They are also the biggest investors in Mediobanca.
“The presence of the same shareholders in Monte Paschi, Mediobanca and Assicurazioni Generali, and in the context of an all-share offer, represents a potential misalignment of interests relative to other shareholders,” Mediobanca said in the statement.
Monte Paschi’s pursuit has added to a whirlwind of proposed deals sweeping across Italy. The country’s third-biggest lender, Banco BPM SpA, offered to buy the domestic asset manager Anima Holding SpA in November, only to become a takeover target itself when UniCredit SpA launched a bid for it a few weeks later.