Monte dei Paschi di Siena (MPS), the world's oldest bank, is considering defensive maneuvers to counter an unsolicited $35 billion takeover bid from Italy's largest bank, Intesa Sanpaolo. MPS CEO Luigi Lovaglio has proposed two potential share swaps: one with Italy's fourth-largest bank, Banco BPM, and another with Banca Generali, the wealth manager for Italy's top insurer Generali. Another defensive option under consideration is an extraordinary dividend for MPS shareholders.
Intesa Sanpaolo's offer, valued at $35.3 billion (or 30.6 billion euros), was made on June 8 and represents a 12.5% premium over MPS's closing share price at the time. This bid was a direct counter to an earlier "merger of equals" proposal from Banco BPM. If Intesa's bid is successful, it would create one of Europe's most valuable banks and boost Intesa's position as the biggest lender in Italy.
To address potential antitrust concerns, Intesa has already arranged to sell 635 MPS branches and the MPS brand to insurer Unipol if its takeover proceeds. Unipol intends to combine these assets with BPER Banca, creating a new entity that would operate under the Banca Monte dei Paschi name. MPS CEO Lovaglio has publicly expressed concerns about Intesa's bid, arguing that splitting the bank's assets would diminish Italy's competitive fabric.
