MPS sets twin bank bids to counter Intesa

Banca Monte dei Paschi di Siena has announced two voluntary public exchange offers aimed at acquiring Banco BPM (BAMIm) and Banca Generali through all-share transactions. The move provides an alternative to a takeover approach for MPS by Intesa Sanpaolo (ISPm) and marks a significant restructuring proposal within the Italian banking sector.

MPS values the combined offers at about €34 billion. Banco BPM (BAMIm) is valued at approximately €25.3 billion, with an exchange ratio of 1.567 newly issued MPS shares for each Banco BPM share. Banca Generali is valued at about €8.7 billion, corresponding to 6.958 newly issued MPS shares for each Banca Generali share.

The two offers are structured as independent transactions. MPS has stated that neither is conditional on the other, meaning each could proceed on its own depending on shareholder responses and regulatory outcomes.

To accompany the proposed acquisitions, MPS plans an extraordinary distribution of €4 billion to its shareholders. The distribution is split between €1 billion in cash and €3 billion in shares of Assicurazioni Generali held by MPS.

This planned payout is presented alongside the exchange offers and would be executed in addition to the share-based consideration being offered to Banco BPM and Banca Generali shareholders.

MPS has outlined pro-forma projections for the enlarged banking group if the transactions are completed. The combined entity is projected to have a market capitalisation of about €80 billion and a balance sheet of roughly €466 billion in assets.

Management estimates annual pre-tax synergies of around €2.6 billion from integrating the businesses. The targeted completion date for the operations is around mid-February 2027, with acceptance periods for the offers indicated as potentially running between December 2026 and February 2027.

These timelines and figures are subject to change, as the deals require approval from shareholders and clearance by relevant regulatory authorities.

The dual exchange offers were approved at an extraordinary meeting of MPS’s board of directors. Reporting on the meeting noted that the vote recorded nine members in favour and four abstentions, signaling sufficient internal backing to launch the plan.

While MPS proceeds with its strategy, Intesa Sanpaolo (ISPm) is reviewing the communications related to the offers. Intesa has indicated it is considering submitting observations or a complaint to market regulator Consob in relation to MPS’s disclosures and the structure of the proposals.

Any future outcome for MPS, Banco BPM and Banca Generali will depend on how shareholders respond to the offers and how regulators assess the competing strategic plans now in play.