Italy neutral on Monte Paschi, may sell its stake through share placement
Government Stance and Future of Monte dei Paschi di Siena (MPS)
By Giuseppe Fonte
Government's Neutral Position on Mergers and Acquisitions
ROME, June 18 (Reuters) - The Italian government will take a neutral stance regarding merger and acquisition moves targeting bailed-out bank Monte dei Paschi di Siena (MPS), the economy minister told parliament on Thursday.
Minister's Statement to Parliament
Addressing lawmakers in the Senate, Minister Giancarlo Giorgetti also said that a share placement through an accelerated bookbuilding procedure (ABB) would be "one of the best solutions" to cut Italy's residual 5% stake in MPS.
Recent Acquisition Bids and Market Interest
Intesa Sanpaolo's Unsolicited Bid
Italy's top banking group Intesa Sanpaolo this month made a €30.6 billion ($35.10 billion) unsolicited cash-and-share bid to buy MPS to create the euro zone's second-largest lender.
Banco BPM's Interest in Merger
Banco BPM, Italy's fourth-largest bank, also said it wanted to open talks with MPS about a potential merger.
Government's Approach to Consolidation and Sale
Official Neutrality and Sale Timing
"The economy ministry will take a neutral stance regarding the ongoing consolidation process, without taking a position on the extraordinary transactions that have been announced or on any alternative transactions," Giorgetti said, confirming previous Reuters reports.
"The timing of the sale of Italy's residual stake in MPS must take this aspect into account," Giorgetti said, suggesting that the Treasury could sell its shareholding before Intesa's bid starts.
Political Context and Party Positions
Matteo Salvini's co-ruling League Party, of which Giorgetti is a leading member, has in the past expressed support for a BPM-MPS tie-up, but Giorgetti's comments suggest the League has pulled back from this position.
Golden Power Rules and Strategic Assets
Despite its neutrality, the government does not rule out setting conditions on the terms of any deal under golden power rules aimed at shielding strategic assets, the minister added.
Background: Italy's Stake and Future Plans
History of State Ownership
Italy owns 4.86% of MPS after rescuing the bank in 2017 through a costly bailout agreed with European Union authorities, and later returning it into private hands through three stake placements starting in late 2023.
Commitment to Divestment
"Italy's commitment is to divest its stake in MPS, but this step must be taken under the best market conditions to ensure that the investment made over time yields the maximum return," Giorgetti said.
Concerns Over Foreign Influence
French Stake in Banco BPM
In answer to lawmakers who raised concerns over the influence of France's Credit Agricole on Banco BPM through its stake of more than 20%, Giorgetti quipped: "when Italy plays against France, I root for Italy."
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(Reporting by Giuseppe Fonte, editing by Alvise Armellini and Gavin Jones)