Monte dei Paschi Approves Banco BPM, Banca Generali Bids in Defence

Monte dei Paschi Bids for Banco BPM and Banca Generali to Counter Intesa Move

Monte dei Paschi’s Strategic Response to Intesa’s Takeover Bid

By Valentina Za, Andrea Mandala and Giulio Piovaccari

Board Approval and Background

MILAN, Aug 20 (Reuters) – The board of Monte dei Paschi di Siena approved on Thursday bids for Banco BPM and for wealth manager Banca Generali to counter a €36 billion ($42 billion) takeover bid from larger rival Intesa Sanpaolo, a source close to the matter said.

The board gave majority, rather than unanimous backing to the proposal by CEO Luigi Lovaglio, Italian media reported.

Previous Negotiations and Investor Influence

MPS had already explored a potential deal with Banco BPM to thwart Intesa’s takeover, but the two banks said on July 31 they were ending their talks after BPM’s main investor, France’s Credit Agricole, expressed its disapproval of the plan.

Analysts’ Perspectives on MPS’s Options

Analysts have suggested MPS could make use of an asset acquired through its 2025 takeover of Mediobanca, a 13% stake in Italy’s biggest insurer Generali, or draw on its own cash reserves to bolster returns to shareholders and counter the €3 billion in cash Intesa has offered.

Generali Stake and Strategic Decisions

Worth €8.5 billion at current market prices, the Generali stake could be sold or traded for another asset, analysts have said. Lovaglio declined to provide any details during an analyst call on August 7. People familiar with Lovaglio’s plans have previously ruled out disposing of the Generali stake.

Break-up and Industry Implications

BREAK-UP

Intesa plans to retain Mediobanca, the Generali stake, and roughly half of MPS’s branch network, having agreed to sell the other half to address antitrust concerns.

Lovaglio has criticised that plan, saying it will destroy value, while Prime Minister Giorgia Meloni has expressed her hope MPS may not be “dismembered”, despite insisting the government is playing no active role.

Consolidation Wave in Italian Banking

Intesa’s unsolicited cash-and-share offer in June marked the latest development in a consolidation wave that has reshaped Italian banking over the past 21 months.

Italian banks spent years restructuring before profits hit record levels when interest rates rose from 2022. MPS became the poster child for the sector’s overhaul.

MPS’s Recent History and Shareholders

Having been rescued by the state in 2017 and reprivatised in 2023 to 2024, it bought bigger peer Mediobanca with a €16 billion hostile bid and gained control of its prized stake in Generali.

MPS’s biggest shareholders are Delfin, the investment vehicle of the Del Vecchio family, an eyewear business dynasty, and construction tycoon Francesco Gaetano Caltagirone. Both are also major Generali investors.

Other Major Players and Market Dynamics

Intesa launched its bid while UniCredit, Italy’s second-biggest bank, was busy with a takeover of Germany’s Commerzbank. In recent months UniCredit had also built a Generali stake which it described as a financial investment.

($1 = 0.8559 euros)

(Reporting by Valentina Za, Andrea Mandala and Giulio Pioavaccari; Editing by Elaine Hardcastle and Gavin Jones)