Title: Monte dei Paschi Proposes Stock-for-Stock Acquisition of Mediobanca
The globally recognized, ancient banking institution, Monte dei Paschi di Siena of Italy, has initiated a sweeping all-share acquisition bid. The target is its larger domestic competitor, Mediobanca. The offer, launched on Friday, is worth an impressive €13.3 billion ($13.95 billion).
Following the announcement, the stock market reacted. Monte dei Paschi’s shares dipped by 5.74% as of 09:43 a.m. London time. On the other hand, Mediobanca’s shares saw an increase, rising by 6.28%.
The proposed deal involves an exchange of 23 shares of Monte dei Paschi for every 10 shares of Mediobanca. This arrangement values each Mediobanca’s share at approximately €15.992 – that’s a 5% premium on the closing price of January 23.
As per the data from FactSet, the equity of Monte dei Paschi was valued at €8.7 billion at the close of January 23. In contrast, Mediobanca’s market capitalization was higher, standing at €12.3 billion.
Mediobanca, as of writing, has not publicly commented on the situation. CNBC reached out to the bank for a statement.
Monte dei Paschi, known as the world’s oldest bank, underwent a state rescue in 2017 due to massive losses. However, under the guidance of UniCredit veteran Luigi Lovaglio, the bank has significantly improved its circumstances. The Italian government still holds an 11.73% stake in the bank.
Following the announcement, the Italian banking union Fabi commented that the potential transaction could significantly impact the dynamics of Italy’s financial system. It also noted that the bid confirms Monte dei Paschi’s successful recovery.
The recent offer from Monte dei Paschi paints a picture of an increasingly active mergers and acquisitions environment within Italy’s banking and financial services sector. This move comes after UniCredit, the country’s second-largest bank, previously proposed a buyout of Banco BPM, which is also looking to acquire fund manager Anima Holding.
This article will continue to be updated as the story unfolds.
