Italy's MPS says Intesa bid undervalues bank, flags antitrust and synergy concerns
Overview of MPS Response to Intesa Sanpaolo's Takeover Bid
MILAN, July 16 (Reuters) - Italy's Monte dei Paschi di Siena (MPS) said on Thursday a €30.6 billion ($34.9 billion) unsolicited takeover bid from larger rival Intesa Sanpaolo undervalued the bank, while highlighting concerns over proposed synergies and regulatory hurdles.
MPS, which was rescued by the Italian state in 2017 and reprivatised from 2023 to 2024, has become a focal point of merger activity since it acquired Mediobanca, a move that made it the main investor in insurer Generali, a major player in Italian financial services.
After a meeting on Thursday, the MPS board said it would continue to assess Intesa's offer while also deepening its review of a separate "merger of equals" proposal it received last month from Banco BPM, another Italian lender.
Alternative Merger Proposal from Banco BPM
"The Combination Proposal received from Banco BPM deserves a comprehensive and rigorous assessment," MPS said in a statement.
Assessment of Intesa's Offer
Premium Offered by Intesa
PREMIUM OFFERED BY INTESA LOWER THAN AVERAGE
Intesa, Italy's biggest bank, last month unveiled a cash-and-share offer for MPS that would create the euro zone's second-largest listed lender by market value.
Intesa would offer 1.6 of its own shares plus €1 in cash for each MPS share tendered at a 12.5% premium to MPS shares' closing price on the last trading day before the bid announcement.
"The premium appears lower than the average level of premia observed in comparable voluntary public tender and/or exchange offers in the Italian banking sector, equal to approximately 30%," MPS said.
MPS shares closed at €11.38 on Thursday, after rising around 27% since Intesa announced its bid. Intesa shares closed at €6.39.
Synergy and Valuation Concerns
PROPOSED SYNERGIES TOO HIGH
The MPS board also expressed doubts about annual pre-tax synergies of €2.9 billion Intesa projected as part of its bid, composed of both cost savings and revenue enhancement.
They "appear high relative to the economic scale" of the MPS assets in the deal, it said.
Antitrust and Regulatory Issues
To address competition concerns, Intesa has agreed to sell to insurer Unipol, a banking business comprising around 635 MPS branches, roughly half the network, and the lender's central offices in Siena.
Unipol, the largest investor in BPER Banca, will then merge those assets with BPER, to create a bank operating under the Banca Monte dei Paschi name.
Uncertainty Over Antitrust Reviews
MPS on Thursday said significant uncertainty remained over antitrust reviews, including possible remedies regulators could require and assessments linked to Intesa's acquisition of the Generali stake through the MPS deal.
Additional Information
($1 = 0.8763 euros)
(Reporting by Giulio Piovaccari; Editing by Keith Weir and Cynthia Osterman)
