Italy's Mediobanca says MPS bid's value a third lower than fair

By Valentina Za

MILAN (Reuters) -Mediobanca on Friday renewed its opposition to Monte dei Paschi's takeover offer, saying the price was "totally inadequate" and some 32% lower than what the bank's board deemed fair.

Monte dei Paschi's (MPS) 14.6 billion euro ($17 billion) all-share bid for Mediobanca is one of a dozen takeover bids reshaping Italian finance.

BPER Banca on Friday said it had acquired 58.5% of Banca Popolare di Sondrio as it concluded its bid, after improving the all-stock offer with a 1 euro per share cash top-up.

MPS targeted Mediobanca in January after UniCredit in November bid for Banco BPM, the merger partner favoured by Italy's government for MPS - which Rome rescued in 2017 and had been returning to private hands.

Mediobanca said advisers Centerview Partners, Goldman Sachs and Equita SIM had provided fairness opinions which, on average, showed the offer's exchange ratio should be of 3.71 MPS shares for each Mediobanca share tendered.

MPS is offering instead 2.533 of its own stock for each Mediobanca share.

Mediobanca said a combination such as the one proposed by MPS had often proven a failure in the past.

MPS, which for years epitomised Italy's banking woes, is looking to combine its commercial franchise with Mediobanca's branch-less operations comprising consumer finance, investment banking and wealth management.

It would run the two groups separately but sell Mediobanca products to MPS customers or use the commercial bank to support Mediobanca's other businesses.

Mediobanca noted that "previous mergers between commercial banks and wealth managers/private banks ... have often led to goodwill write-downs and reductions in assets under management."

To fend off MPS, Mediobanca had proposed focusing its business on wealth management by buying private bank Banca Generali from Generali - Italy's biggest insurer in which Mediobanca is the single largest investor.

The Banca Generali bid, which Mediobanca has been forced to delay, would see Mediobanca use its stake in Generali as payment, severing its historic ties with the insurer.

Those ties have long been criticised by Italy's Del Vecchio and Caltagirone billionaire families, who are leading shareholders in both Generali and Mediobanca.

The two families have now become key MPS investors and are expected to support its bid for Mediobanca.

The Milanese bank, which was born after World War Two to fund the country's reconstruction and used to pull the strings of Italy Inc, complained about potential conflict of interest given interlocking shareholdings.

"The presence of the same shareholders ... in MPS, Mediobanca and Assicurazioni Generali in the context of an offer exclusively in shares also constitutes a potential misalignment of the interests of these shareholders with those of the rest," it said.

($1 = 0.8552 euros)

(Reporting by Valentina Za, editing by Gavin Jones and Marguerita Choy)