Italy’s Mediobanca rejects Monte dei Paschi’s ‘destructive’ 13-billion-euro takeover bid

Shareholders of Italian lender Mediobanca on Tuesday rejected a 13-billion-euro takeover offer from smaller domestic peer Monte dei Paschi, amid a ramp-up in consolidation bids in the Italian banking sector.

 “The Offer is devoid of industrial and financial rationale and is therefore destructive for Mediobanca,” the lender said in a statement.

The company added that the proposal has no industrial value, compromises Mediobanca’s identity and business profile, as well as gains for shareholders of both the lender and Monte dei Paschi, “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.”

CNBC has reached out to Monte dei Paschi for comment.

Monte dei Paschi shares were down 1.32% at 1:08 p.m. London time following the news, with Mediobanca shedding 2.7%.

The world’s oldest bank, the bailed-out Monte dei Paschi (MPS) unexpectedly launched an all-share takeover proposal for Mediobanca (MB) on Friday, offering 23 of its shares for 10 of those of its acquisition target and valuing Mediobanca’s stock at15.992 euros each — or a 5% premium to the close price of Jan. 23. Some analysts have questioned the synergies that might result from the two banks’ union, with a Barclays note on Jan. 27 flagging that “this complementarity, the value creation drivers and in general MPS strategy on MB are not yet clear.”

Tuscany’s Monte dei Paschi, which required state rescue in 2017 after years of battering losses, has long been the poster child of trouble in the Italian banking sector, before a brisk turnaround in its fortunes after the 2022 appointment of UniCredit veteran Luigi Lovaglio to helm the bank.

The Italian government has long sought to privatize the lender, but retains a 11.73% stake after diluting its position last year. Monte dei Paschi’s investors include Mediobanca shareholders such as business tycoon Francesco Gaetano Caltagirone and Delfin — the holding company of late billionaire Leonardo del Vecchio, which increased its MPS stake to 9.78% since January.

In its Tuesday statement, Mediobanca stressed the “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” in the context of the takeover offer.

The Rome government of Giorgia Meloni has long attempted to find a partner for Monte dei Paschi, which was once courted as a potential acquisition target by UniCredit until talks dissolved in 2021. Last year, Italy’s third-largest lender Banco BPM purchased a 5% stake in Monte dei Paschi from the government. But UniCredit’s surprise $10.5 billion offer for Banco BPM in November has paralyzed any potential further moves on MPS, pushing Rome into a corner and pitting UniCredit CEO Andrea Orcel against Meloni.

Back in September, UniCredit also unexpectedly spread its wings with a stake build in German lender Commerzbank, raising questions over potential ambitions of cross-border consolidation.