The deal could potentially help both Monte dei Paschi and Mediobanca maintain a robust capital position, as well as deliver profits.
The Italian lender Monte dei Paschi di Siena announced on Friday that it was launching a €13.3 billion takeover bid for larger rival Mediobanca in a surprise move that could reshape the country’s banking sector.
The offer values shares in the investment bank, Mediobanca, at €15.99 each, which was a 5% premium on their closing price on Thursday.
Monte Paschi, Italy’s oldest bank, has a market capitalisation of about €9bn, while Mediobanca’s market value is about €12.7bn.
Under the terms of the offer, Mediobanca investors would receive 23 shares in Monte Paschi for every 10 Mediobanca shares they hold.
Monte Paschi said in a statement it expected the tie-up to generate €700m a year in pre-tax synergies. The Tuscan bank added that the deal “aims to deliver significant profitability levels and to maintain a solid capital position.”
Shares in Mediobanca jumped on the news of the buyout offer on Friday morning, rising by 6.5% as of 11 a.m., while Monte Paschi shares were down by around 4%.
The buyout offer comes after the Italian government moved to re-privatise the once-troubled bank whose largest shareholder has been the Italian Treasury since an expensive bailout in 2017.
It introduced new shareholders in November that include Delfin, the holding company controlled by the family of late billionaire Leonardo Del Vecchio, and Roman tycoon Francesco Gaetano Caltagirone.
Delfin has tripled its stake in Monte Paschi since November to just under 10%, while Caltagirone holds 5%.
Del Vecchio and Caltagirone are also the largest shareholders in Mediobanca, with combined stakes close to 30%.
After decades of financial struggles and restructuring attempts, Monte Paschi has been successfully overhauled in recent years under CEO Luigi Lovaglio.
The Italian Treasury, which has reduced its stake in Monte Paschi from an initial 68% to 11.7%, has been searching for new partners for the bank, after Italy’s UniCredit walked away from a possible deal in 2021.
Monte Paschi’s unexpected offer further heats up the Italian banking sector, which has seen several lenders launch competing bids in recent months.
The Italian government had hoped to merge Monte Paschi with Banco BPM to create a national champion able to compete with larger rivals Intesa Sanpaolo and UniCredit.
But those plans were derailed by UniCredit, which is pursuing a merger with German rival Commerzbank and launched a hostile takeover offer for Banco BPM in November.
