Italy’s MPS reaches threshold in bid for rival Mediobanca

TLE DESK: Italian bank Monte dei Paschi di Siena (MPS) has completed the first stage of its attack on rival Mediobanca, as it seeks to create the country’s third largest banking group.

In an announcement late Wednesday, MPS said it had acquired 38.5 percent of Mediobanca’s shares, exceeding the threshold it set for its takeover offer.

The world’s oldest bank had initially targeted a threshold of 66.67 percent of Mediobanca shares, but dropped this to 35 percent, reports AFP.

In July, MPS said that acquiring a stake between 35 percent and 50 percent would likely allow it to obtain “de facto” control.

However, at least 50 percent plus one share would cement this control, achieve greater synergies and allow the new group to benefit from millions in tax credits.

Mediobanca’s board of directors will meet later on Thursday. It had previously rejected the bid by its smaller rival, deeming it “destructive” and “devoid of industrial and financial rationale”.

MPS was bailed out by the Italian government in 2017 and has long been considered the weak link in the Italian banking sector, although it has begun a clear recovery.

Its January bid for Mediobanca, which valued the rival bank at 13.4 billion euros, stunned the markets.

MPS’s own market capitalisation — 9.7 billion euros as of September 2 — was well below that of its target, at 16.5 billion euros.

But MPS’s offensive has the backing of Italian Prime Minister Giorgia Meloni’s government, which is eyeing a third banking group to compete with Intesa Sanpaolo and UniCredit.

The Italian state still has a stake of 11.7 percent in MPS.

MPS sweetened its offer for Mediobanca shareholders earlier this week. Bidding continues until September 8, and then will reopen from September 16 to 22.

The offensive comes against a backdrop of takeover moves in the Italian banking sector.