Monte dei Paschi di Siena Set for Takeover by Intesa Sanpaolo Amid Bank Merger
Monte dei Paschi di Siena: Timeline and Key Events
By Valentina Za
SIENA, Italy, Oct 29 (Reuters) - Monte dei Paschi di Siena looked set to lose its independence after more than 550 years, with its attempt to fend off Italy's biggest bank having failed to secure the backing of shareholders.
MPS CEO Luigi Lovaglio had sought investor support for a defence plan to keep Intesa Sanpaolo at bay but lost a vote on Thursday, clearing the path for a €33 billion ($36 billion) takeover of the world's oldest surviving lender.
Intesa's plan envisages a break-up of MPS with half of its 1,200 branches being sold to insurer Unipol, together with the central offices in Siena.
Unipol will merge MPS with BPER, another regional bank it controls, under the brand 'Monte dei Paschi'.
Historical Background
Here are some of the key moments in the history of the Tuscan bank through the centuries:
Foundation and Early Years
1472: Begins life as a Monte Pio at the behest of local authorities in the Medieval Tuscan city-state of Siena to help people who had fallen victims to usury.
1624: Monte dei Paschi name adopted after the Grand Duke Ferdinand II of Tuscany grants Monte's depositors a state guarantee for revenue earned from pasture lands. Paschi means pastures in Italian.
Expansion and Growth
1910s to 1980s: MPS builds its presence across central and southern Italy, and then nationwide as Italian industry rebuilds following World War Two.
1999: MPS is listed on the Milan stock exchange, a precursor to the bank launching an acquisition spree.
Major Acquisitions and Financial Crisis
2007: MPS buys Banca Antonveneta from Santander for €9.9 billion - 50% more than the Spanish bank had paid for it months earlier.
2009: At the height of the global financial crisis, MPS issues €1.9 billion in special bonds to Italy's Treasury to bolster its finances.
2011: The Bank of Italy provides €6 billion in emergency liquidity to MPS as the euro zone sovereign debt crisis pummels its large government bond holdings.
Struggles and Bailouts
2012: MPS posts a €4.7 billion loss for 2011 after goodwill writedowns on deals including Antonveneta. In June the bank asks Italy's Treasury to underwrite up to €2 billion in special bonds. A €1 billion share issue follows in October.
2014: MPS raises €5 billion in equity - its third major cash call in six years - before emerging as the worst performer in Europe-wide banking stress tests.
2016: With its finances still precarious despite a €3 billion capital raise the previous year, MPS announces a new €5 billion rights issue and plans to offload €28 billion in bad loans. The cash call fails and MPS turns to the state for help.
2017: The ECB declares MPS solvent and the EU clears an €8.2 billion bailout. Italy buys 68% of the bank for €5.4 billion.
Recent Developments
2021: UniCredit enters exclusive talks with Italy's Treasury to buy "selected parts" of MPS. Three months later the talks collapse.
2022: Veteran UniCredit executive Luigi Lovaglio named MPS CEO. He raises cash to pay for thousands of redundancies.
2023: Italy cuts its stake to 39.2%, and again in March 2024 to 26.7% as the price of MPS shares keeps rising.
2024: Italy sells 15% of MPS to four investors: the Del Vecchio and Caltagirone families; mid-sized bank Banco BPM; and fund manager Anima Holding.
Consolidation and Takeover Bids
2025: In the midst of a banking consolidation wave, MPS in January bids for Mediobanca after UniCredit steps in to stop it from merging with BPM. MPS secures 86% of Mediobanca in September, putting the Tuscan lender at the centre of a potential third Italian banking powerhouse that the government in Rome wants to rival Intesa and UniCredit.
2026: The MPS board and shareholder Francesco Gaetano Caltagirone, unhappy about the plan to buy 100% of Mediobanca, attempt to oust Lovaglio but the Del Vecchios and other shareholders reinstate him as CEO.
Final Takeover Events
June: Intesa announces a shock €30.6 billion unsolicited cash-and-share bid for MPS, prompting MPS to unveil in August two separate all-share bids for Banco BPM and wealth manager Banca Generali.
October: Intesa adds €800 million in cash to its bid on condition shareholders sink Lovaglio's defence plan.
Delfin, Caltagirone and some smaller investors side with Intesa and Lovaglio loses the shareholder vote.
Additional Information
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(Reporting by Valentina Za; Editing by Tommy Reggiori Wilkes and Keith Weir)