Monte dei Paschi di Siena (MPS), the world's oldest bank, has unveiled a daring 13.3 billion euro ($13.95 billion) all-share takeover bid for Mediobanca, a larger domestic rival. Announced this Friday, the offer values Mediobanca's stock at approximately €15.992 each, presenting a 5% premium over its closing price on January 23. This strategic move highlights the bank’s growing strength under the leadership of CEO Luigi Lovaglio, a seasoned veteran from UniCredit.
Monte dei Paschi, which required a state bailout in 2017 following years of debilitating losses, has since turned its fortunes around. The bank's equity was valued at 8.7 billion euros as of January 23, whereas Mediobanca’s market capitalization stood at 12.3 billion euros, according to FactSet data. In this bold acquisition attempt, MPS proposes an exchange of 23 of its shares for every 10 shares of Mediobanca.
The market reacted swiftly to the announcement. As of 09:43 a.m. London time, shares of Monte dei Paschi had fallen by 5.74%, reflecting investor caution. Conversely, Mediobanca's shares rose by 6.28%, indicating positive sentiment towards the potential merger. Despite the market fluctuations, the Italian government continues to hold an 11.73% stake in Monte dei Paschi.
This takeover bid is part of a larger trend of mergers and acquisitions in Italy’s banking and financial services sector. The Italian banking union Fabi remarked on the impact of such moves:
"The transaction could contribute to complete the dynamics of the Italian financial system, in the context of strong consolidation," – Italian banking union Fabi
Recently, UniCredit made an offer to acquire Banco BPM, which itself is seeking to purchase fund manager Anima Holding. Interestingly, Monte dei Paschi was once considered a potential acquisition target for UniCredit until discussions fell through in 2021.
The proposal by Monte dei Paschi underscores its robust recovery and the strategic vision of its leadership to expand its footprint in Italy's financial landscape. By absorbing Mediobanca, MPS aims to fortify its position and leverage synergies that would arise from such a consolidation.
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