Monte dei Paschi di Siena (MPS) is preparing all-share takeover bids for Banco BPM and Banca Generali as a defensive strategy against Intesa Sanpaolo's unsolicited €36 billion tender offer for the Siena-based lender.
The proposed transactions, valued at roughly €25 billion for Banco BPM and nearly €8 billion for Banca Generali, would create an enlarged financial group with a combined market capitalization of approximately €70 billion. The MPS board, including CEO Luigi Lovaglio, has backed the plan, which also includes a prospective cash dividend to secure support from existing shareholders.
Intesa's offer, launched in June, seeks to acquire MPS and dismantle the historic institution under its restructuring blueprint. The plan involves transferring key infrastructure and about half of MPS's 1,260 branches to insurer Unipol, while absorbing MPS's controlling stake in Mediobanca. The Italian government, which retains a minority stake in MPS following its 2017 state rescue, has signaled support for the creation of a third domestic banking pillar to counterbalance Intesa and UniCredit.
The twin bids follow the collapse of informal merger talks between MPS and Banco BPM last month, after major investor Crédit Agricole withheld its backing. The current proposal proceeds without prior buy-in from Crédit Agricole or Generali, which holds a controlling stake in Banca Generali. Under related-party transaction rules, Generali's tendering of its stake for MPS equity would require rigorous oversight from independent directors.
MPS's strategy faces execution challenges, including fragmentation among its board and shareholder base. The lender's defense aligns with Rome's long-term ambition to strengthen Italy's banking sector by fostering competition beyond the dominant Intesa-UniCredit duopoly.
