Monte dei Paschi di Siena (MPS) CEO Luigi Lovaglio has unveiled a strategy to counter a €36 billion takeover bid from rival Intesa Sanpaolo by launching two voluntary, simultaneous, and parallel public exchange offers for Banco BPM and Banca Generali. The all-share bids total approximately €34 billion, with Banco BPM valued at €25.35 billion (based on an exchange ratio of 1.567 MPS shares for each Banco BPM share) and Banca Generali valued at €8.72 billion (offering 6.958 new MPS shares per Banca Generali share, representing a 10% premium).
This move by MPS aims to create a larger banking group, making it Italy's third-largest in terms of total assets, with a pro forma balance sheet of approximately €466 billion based on December 31, 2025, figures. The combined entity would have loans to customers of €245 billion, direct deposits of €315 billion, and total financial assets of €810 billion, with a projected market capitalization of €80 billion. MPS shareholders would hold about 50.1% of the combined group, Banco BPM shareholders around 37.2%, and Banca Generali shareholders approximately 12.7%.
The plan also includes an extraordinary distribution of €4 billion to existing MPS shareholders, paid partly in cash (€1 billion) and partly in Generali shares (€3 billion), corresponding to about 4.5% of Generali's share capital. This special dividend amounts to €1.208 per MPS share. Furthermore, total distributions exceeding €15 billion are expected for MPS shareholders over 2026–2030, based on a 100% payout ratio. The transactions are expected to generate significant value through approximately €2.6 billion in annual pre-tax run-rate synergies, leading to a pro forma cost-to-income ratio of around 36% in 2025 and a return on average tangible equity exceeding 19% by 2029.
The offers are contingent on regulatory approvals and a minimum acceptance level of 50% plus one share from the target companies. The transactions are anticipated to finalize by mid-February 2027, with shareholder approval sought at a general meeting on October 29. MPS's board approved Lovaglio's plan with nine votes in favor and four abstentions, despite prior disapproval from Banco BPM's main investor, France's Credit Agricole, regarding a potential deal. Intesa Sanpaolo's bid, in contrast, aimed to retain Mediobanca, the Generali stake, and about half of MPS's branch network, a plan Lovaglio criticized as value-destructive.
