Monte Paschi launches €34B twin bids to fend off Intesa takeover

Banca Monte dei Paschi di Siena on Friday launched simultaneous all-share takeover bids worth approximately €34 billion ($39.8 billion) for rival lender Banco BPM and wealth manager Banca Generali, escalating a consolidation battle reshaping Italy's banking sector.bloomberg+1

The move represents CEO Luigi Lovaglio's boldest attempt to fend off a €36 billion hostile takeover approach launched by Intesa Sanpaolo in June, which sought to absorb MPS in a deal opposed by management and viewed by Rome as potentially reducing competition in domestic banking.euronews+1

Deal Structure

MPS is offering 1.567 newly issued shares for each Banco BPM share, valuing that target at €25.3 billion, and 6.958 shares for each Banca Generali share, valuing the wealth manager at €8.7 billion. The Banco BPM offer implies no premium to Wednesday's closing price, while the Banca Generali offer carries a 10% premium.aol+2

As part of the plan, MPS proposed an extraordinary €4 billion distribution to its shareholders — €1 billion in cash and €3 billion through shares in Assicurazioni Generali, in which MPS holds a 13.3% stake via its subsidiary Mediobanca.marketscreener+1

The announcement failed to impress investors at the Milan open: Banco BPM shares slipped while Banca Generali fell around 2.7%, even as MPS edged higher.investing+1

A Third Banking Pole

If completed by the targeted mid-February 2027 deadline, the combined group would become Italy's third-largest banking group by assets, with a pro-forma balance sheet of roughly €466 billion, more than €810 billion in total financial assets, and estimated annual pre-tax synergies of €2.6 billion. Lovaglio told analysts the entity would rank among Europe's top ten banks by market capitalization, at approximately €80 billion.live.euronext+2

"We are creating a stronger Italian group of European relevance, rooted in the national economy and ready to compete in a constantly evolving sector," Lovaglio said, describing the proposal as a "friendly, non-hostile combination".euronews+1

Political and Shareholder Hurdles

MPS shareholders — including the Del Vecchio family (17.5%), the Caltagirone group (10.2%), BlackRock ↗ 1.47% (5%), and Italy's Ministry of Economy (4.8%) — approved the passivity-rule waiver at an extraordinary meeting on Thursday, clearing a legal prerequisite for the bids. A full shareholder vote on the plan is scheduled for October 29.euronews+1

The deal faces complications from Crédit Agricole, which holds nearly a third of Banco BPM's capital. Deputy CEO Jérôme Grivet said last month: "Nothing can happen against us or without us". Generali, which controls more than half of Banca Generali, would also need to decide whether to tender its stake.fstech

Prime Minister Giorgia Meloni has publicly supported MPS's strategy, telling Milano Finanza last week she hoped the bank would not end up "broken up". Italia Viva senator Ivan Scalfarotto countered that the government should remain neutral: "We are not cheerleaders, we believe in the market: the numbers are what counts, let the best win".euronews+1