By Valentina Za
SIENA, Italy (Reuters) -Monte dei Paschi di Siena expects to launch its 12.5 billion euro ($14 billion) takeover offer for Mediobanca in the summer, after securing shareholder approval on Thursday for the hostile bid.
Normally rare in finance, hostile moves are sweeping through Italian banking, which is bracing for slowing revenue as interest rates decline after fuelling record profits in recent years.
MPS shocked investors in January by bidding for a revered name in the industry, whose wealth and investment banking operations it wants to combine with its commercial network.
“We’re in an intense phase of consolidation. We decided to make a move because we didn’t think it’d be a good idea to just sit tight and wait,” MPS CEO Luigi Lovaglio told shareholders at a meeting in the Tuscan city of Siena.
“We are deeply convinced that size matters … and this is a good combination.”
The tie-up will give the new entity an advantage in an expected second round of consolidation in Italian finance in coming years, he added.
For MPS, the surprise bid marks the culmination of the restructuring the bailed-out bank completed under Lovaglio, at the helm since 2022.
MPS shareholders representing 86.5% of capital at Thursday’s meeting approved the share issue needed to finance the bid. Attendance stood at 73.6% of overall capital.
The ball is now in the court of Mediobanca’s shareholders, who will need to decide whether to tender their shares once a bid is formally launched. The necessary approvals are expected by the end of June or in July, Lovaglio said, paving the way for the tender period to start.
Mediobanca has rejected the approach, saying it would destroy value for its shareholders.
Italy acquired 68% of MPS in 2017 as part of an 8 billion euro bailout that became necessary after the world’s oldest bank burnt through 17 billion euros in fresh capital during the previous decade.
Plagued by political interference, MPS was brought to its knees by a disastrous acquisition on the eve of the global financial crisis.
The bank returned to pay a dividend out of 2023 profits for the first time in 13 years, after using the bailout money to shed a mountain of bad debts, and cash from a 2022 new share issue to lay off one-fifth of its staff to cut costs.
CORE INVESTORS
Italy owns 11.7% of MPS after three stake placements since November 2023 which have raised 2.7 billion euros in total.
It completed the last one in November 2024, selling 15% of MPS at a premium versus market prices and bringing onboard a core of Italian shareholders who played a key role in supporting the bid.
Italian construction tycoon Francesco Gaetano Caltagirone, and Delfin, the investment vehicle of late billionaire Leonardo Del Vecchio, took a combined 7% stake which has since risen to almost 20%.
Caltagirone and Delfin together also own 27% of Mediobanca and 17% of insurer Generali, prompting Mediobanca to complain about their cross-shareholdings.
As Generali shareholders they have clashed with Mediobanca, which is the main investor in the insurer.
Supporters of the proposal on Thursday include other Italian investors such as pension funds, as well as bank Banco BPM and fund manager Anima Holding.
Anima partners with both MPS and Banco BPM, and it has just been taken over by the latter. Banco BPM was the Treasury’s preferred choice as a partner for MPS, but that plan was derailed by UniCredit CEO Andrea Orcel.
Lovaglio said Orcel’s swoop on BPM had prompted the decision to dust off the Mediobanca project, which had first been considered in 2022, as an alternative to the BPM deal.
A ‘yes’ vote came also from some international investors such as Norway’s sovereign wealth fund, as well as PIMCO, Amundi and Vanguard, which owns 3.5% of MPS.
“We’ve held more than 100 investor meetings and that helped,” Lovaglio said. ($1 = 0.8787 euros)
(Reporting by Valentina ZaEditing by Keith Weir)
