Monte dei Paschi, the world’s oldest bank, has launched an audacious all-share takeover proposal for the Italian financial giant, Mediobanca, on Friday. The proposal valued Mediobanca’s stock at 15.992 euros each, representing a 5% premium over its closing price on January 23. Monte dei Paschi offered an exchange of 23 of its shares for every 10 shares of Mediobanca. However, skepticism surrounds the proposal, with some analysts questioning the potential synergies of this union. Despite the offer being valued at 13 billion euros, Mediobanca shareholders have decisively rejected it on Tuesday.
Barclays raised concerns about the proposal's viability in a note published on January 27. The note highlighted potential issues with Monte dei Paschi's bid, observing that "this complementarity, the value creation drivers and in general MPS strategy on MB are not yet clear." Mediobanca also voiced apprehensions, stating that the offer lacked industrial and financial rationale, branding it as "destructive" for the bank.
"The Offer is devoid of industrial and financial rationale and is therefore destructive for Mediobanca."
— Mediobanca
Mediobanca emphasized the "significant cross-shareholdings of Delfin and Caltagirone" in both Monte dei Paschi and Assicurazioni Generali. The bank questioned whether these cross-shareholdings might lead to a misalignment of interests compared to other shareholders. Delfin is notably the holding company of the late billionaire Leonardo del Vecchio, while Francesco Gaetano Caltagirone stands as a prominent business tycoon among Mediobanca's shareholders.
"significant cross-shareholdings of Delfin and Caltagirone" in the lender, Monte dei Paschi and Italian insurer Assicurazioni Generali, questioning whether this represents a "potential misalignment of interests relative to other shareholders."
— Mediobanca
Following the news, Monte dei Paschi shares dropped by 1.32% as of 1:08 p.m. London time, while Mediobanca shares fell by 2.7%. This market reaction underscores investors' reservations about the proposed merger.
The Italian government, which retains an 11.73% stake in Monte dei Paschi, has long aimed to privatize the historic bank. Last year, Banco BPM acquired a 5% stake from the government. Meanwhile, efforts by Prime Minister Giorgia Meloni's administration to find a strategic partner for Monte dei Paschi have been hindered by various factors, including UniCredit's unexpected $10.5 billion offer for Banco BPM in November.
Mediobanca further expressed concerns regarding potential losses in business segments like Wealth Management and Investment Banking if the takeover proceeded. They stressed the importance of maintaining professionals who are independent and possess high standing and professionalism within these areas.
"given the likelihood of a significant loss of customers in those business areas (such as Wealth Management and Investment Banking) which require professionals who are independent and of high standing and professionalism."
— Mediobanca
Leave a Reply