A fierce competition has erupted for control of Monte dei Paschi di Siena, the world’s oldest bank, between two prominent Italian lenders, Intesa Sanpaolo and Banco BPM. The rivalry intensified on Monday when Intesa Sanpaolo put forth an unsolicited bid valued at 30.6 billion euros (approximately $35.3 billion). This offer, representing a significant premium of 12.5% over MPS’s closing share price from the previous Friday, is aimed at establishing Intesa as Europe’s second-largest bank by market capitalization.
The timing of Intesa’s proposal is critical, as it arrives shortly after Banco BPM announced on Sunday its board’s unanimous decision to explore a potential “merger of equals” with Monte dei Paschi. However, details regarding the structure of the proposed merger were scarce, with the bank only indicating that the arrangement would ensure balanced representation for both entities in any newly formed institution.
Monte dei Paschi underwent a state bailout in 2017, which led to its eventual re-privatization in 2023. Since that time, the bank has become a focal point in the ongoing consolidation trends within the Italian banking sector, notably expanding its influence by acquiring Mediobanca last year, making it the largest shareholder in the insurer Generali.
In this competitive backdrop, Credit Agricole, Banco BPM’s largest shareholder, expressed interest in exploring opportunities for value creation that could bolster BPM in its pursuit of the merger with MPS. This endorsement may give Banco BPM an added advantage in the negotiations ahead.
Market reactions to the ongoing bidding war have been mixed. Shares of Intesa Sanpaolo and Banco BPM fell by 4% and 1.1%, respectively, while shares of Monte dei Paschi saw a slight uptick, rising by 0.9% in early trading on Monday. The landscape of the Italian banking sector continues to evolve, with these developments signaling a pivotal moment for Monte dei Paschi di Siena in its storied history.
