Shares of Banca Generali and Banco BPM declined on Friday after Banca Monte dei Paschi di Siena (Monte Paschi) launched all-share takeover bids for both companies in a combined €34 billion ($39.8 billion) deal.
Monte Paschi proposed a €25.3 billion offer for Banco BPM and an €8.7 billion bid for Banca Generali, based on the latter’s closing price two days prior. If successful, the transactions would create an entity with a combined market capitalization of roughly €70 billion and total assets of about €450 billion. Monte Paschi also outlined plans to distribute an additional €4 billion in dividends, to be funded through a mix of cash and shares linked to its stake in Assicurazioni Generali.
Banca Generali’s shares fell 2.7% on Friday, while Banco BPM slipped 0.4% in early Milan trading. The moves followed Monte Paschi’s announcement of the dual offers, which CEO Luigi Lovaglio framed as a defensive strategy against Intesa Sanpaolo’s earlier bid for Monte Paschi, made slightly over two months ago.
The proposed acquisitions aim to expand Monte Paschi’s presence in wealth management via Banca Generali and strengthen its foothold in northern Italy through Banco BPM. The strategy comes after a previously planned merger of equals between Monte Paschi and Banco BPM collapsed. Monte Paschi has scheduled a shareholder meeting for October 29 to seek approval for the transactions.
