Italian bank Monte dei Paschi launches 13 billion euro takeover bid for peer Mediobanca

ROME — Italian lender Monte dei Paschi di Siena announced on Friday it was launching a 13.3 billion euro ($13.9 billion) takeover bid for peer Mediobanca in a surprise move that could reshape the country’s banking sector.

The offer values Mediobanca’s shares at 15.99 euros each, a 5% premium to their closing price on Thursday.

Monte Paschi currently has a market capitalization of about 9 billion euro, while Mediobanca’s market value is about 12.7 billion euros.

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 700 million euros 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.”

The buyout offer comes as the Italian government is moving to re-privatize a bank whose largest shareholder has been the government since a bailout in 2017.

It introduced new shareholders in November that include Delfin, the holding company 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%.

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 intial 68% to 11.7% has been searching for new partners for the lender, after Italy’s UniCredit walked away from a possible deal in 2021.