In This Article:
(Bloomberg) -- Banca Monte dei Paschi di Siena SpA made a surprise offer to acquire larger rival Mediobanca SpA in a deal valued at €13.3 billion ($13.9 billion), adding a new twist in a series of takeover attempts that are shaking up Italy’s banking industry.
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Mediobanca considers the approach hostile and will likely end up rejecting it, according to a person familiar with the matter. Shares of Mediobanca, the larger of the two lenders by market value, rose as much as 6.9% in Milan trading Friday, while Monte Paschi slumped as much as 10%.
“We think the synergy potential is limited” between the two banks, KBW analyst Hugo Cruz said in a reaction note. “Our first impression is that this offer has limited chances of success.”
The surprise announcement adds to a whirlwind of proposed deals that has been sweeping across Italy over the past few months. 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.
The situation is complicated by a web of cross-holdings in some of Italy’s largest financial services firms by two billionaire clans, the Del Vecchios and Francesco Gaetano Caltagirone. The two families are major shareholders in Monte Paschi and Mediobanca.
Mediobanca may consider various countermoves, people familiar with the matter have said. The company is led by Chief Executive Officer Alberto Nagel, who has survived previous efforts to oust him by the Del Vecchios and Caltagirone.
The Italian government plays a pivotal role, as it has been seeking to use the privatization of Monte Paschi as a way to create a domestic counterweight to the country’s two dominant banks, UniCredit and Intesa Sanpaolo SpA. Rome still holds about 11.7% in Monte Paschi after various placements over the past 18 months.
The proposed Mediobanca takeover would create a new bank “ranking among the top three institutions in terms of total assets,” Monte Paschi said in the statement on Friday. The Siena-based lender expects the transaction to deliver about €300 million in annual cost savings.
What Bloomberg Intelligence Says:
Monte Paschi’s €13 billion all-share offer for Mediobanca flips the former’s role in Italy’s wave of banking consolidation from a long-suspected target to a consolidator and would create a new national champion if successful. The transaction’s financial value is driven mostly by the use of Monte Paschi’s deferred tax assets of €2.9 billion, while €600 million of planned integration charges appear low.