What is next in Italy's banking saga?

By Valentina Za and Andrea Mandala

MILAN (Reuters) - The raft of takeover attempts rocking Italy's financial sector will be put to a market test in the coming months, when investors in the target companies will be deciding whether to tender their shares.

After receiving a green light from the Bank of Italy on Wednesday, Banco BPM starts the dance this month with its proposed purchase of fund manager Anima Holding.

UniCredit is expected to follow suit in April with its own buyout bid for Banco BPM.

Then there is also the state-backed Monte dei Paschi di Siena (MPS) which surprised markets with its move on Mediobanca, the top shareholder in Europe's third-largest insurer Generali - seen as the ultimate prize in the current market reshuffle.

By swooping on Banco BPM and building a 2 billion euro ($2.1 billion) stake in Generali, CEO Andrea Orcel has put UniCredit at the centre of the wave of dealmaking reshaping the sector.

It is not yet clear how Orcel will play his cards or how it will all pan out, but here is a summary of what investors should watch out for in coming weeks and months.

UNICREDIT'S BANCO BPM BID

UniCredit shareholders will vote on March 27 to approve issuing the shares needed to fund the 10 billion euro ($11 billion) unsolicited bid for Banco BPM.

The European Central Bank is expected to approve the offer around that time, paving the way for UniCredit to launch it in April.

At an around 1 billion euro discount to market prices, the offer is unlikely to succeed without a cash top-up, which Orcel has flagged as a possibility.

Under the conditions of the offer, the changed terms of the Anima deal give UniCredit the right to walk away until just before the offer's settlement, seen in June.

WHAT NEXT FOR BANCO BPM?

BPM's buyout offer for Anima worth up to 1.8 billion euros is set to start in the second half of March. Take-up already stands at 45% given BPM's 22.4% own stake and pledges by leading Anima investors to accept the improved bid.

Shareholders have authorised BPM's board to close the deal even before the ECB decides whether to grant it favourable treatment that would sharply reduce the deal's impact on the bank's capital ratios.

Banco BPM is confident the ECB will rule in its favour. There is no timing yet for the decision, which also matters for UniCredit's decision on the cash top-up.

WHAT ABOUT UNICREDIT'S COMMERZBANK STAKE?

Orcel has said the Banco BPM deal and its subsequent integration would not get in the way of a potential takeover of Commerzbank. UniCredit already owns 28% of its shares and is expected to get ECB approval around mid-March to own up to 29.9%.

Orcel said last month that a decision on whether to go for a full takeover will have to wait for three to five quarters, buying himself time to see how a shareholder battle around Generali unfolds.

WHAT IS HAPPENING AROUND MEDIOBANCA AND GENERALI?

Monte dei Paschi's bid for Mediobanca added a new twist to a years-long battle between Generali's top investors over the insurer's leadership and strategy.

It pits its No.1 investor Mediobanca, which in the past has sided with Generali's management in its stand-offs with construction magnate Francesco Gaetano Caltagirone and Delfin, the vehicle of late eyewear tycoon Leonardo Del Vecchio, who have been pushing for changes.

The two fronts, which recently clashed over Generali's asset management deal with Natixis, will face off at the insurer's annual meeting, probably in late April, that will pick a new board.

MPS' bid for Mediobanca, if successful, could sway the balance in Caltagirone and Delfin's favour, given they acquired 15% of MPS in recent months and already together own 27% of Mediobanca and 17% of Generali directly.

The bid faces a first test on April 17 when MPS' shareholders vote on the share issue needed to finance it.

Italy's Treasury, which still owns 11.7% of MPS following its rescue, plus Caltagirone and Delfin are seen voting in favour.

WHAT IS ORCEL'S PLAN OVER GENERALI?

UniCredit has said it has accumulated a 4.2% stake in Generali as a "financial investment," but it gives Orcel a say in the battle over the insurer's future. Some bankers in Milan see it as primarily a defensive move in case UniCredit's main domestic rival and Italy's no.1 bank Intesa Sanpaolo got involved.

Intesa CEO Carlo Messina has ruled out any current interest in Generali, an acquisition which Intesa studied - and decided against - in 2017.

Italian antitrust limits suggest Intesa might be potentially interested chiefly in Generali's asset management operations, which the insurer is combining with those of France's Natixis in a deal frowned upon by Italy's government.

Messina, whose term is expected to be extended by a further three years at the end of April, has said that Intesa is steering clear of Italy's M&A chaos. Bankers, however, do not rule out that he may join the fray after his reappointment.

($1 = 0.9342 euros)

(Reporting by Valentina Za; Editing by Tomasz Janowski)