The board of Banca Monte dei Paschi di Siena (MPS) has given the green light to a plan by chief executive Luigi Lovaglio to launch two separate public exchange offers – one for Banco Bpm and one for Banca Generali – in a bid to create a larger Italian banking group and counter the hostile takeover launched by Intesa Sanpaolo.
After an extraordinary meeting that lasted around seven hours on Thursday, the Rocca Salimbeni board approved the proposal with nine votes in favour and four abstentions. The offers would be paid entirely in newly issued MPS shares, according to people familiar with the matter.
The decision comes as Intesa Sanpaolo presses ahead with its €30.5 billion public tender and exchange offer (Opas) for MPS, a move that would give Italy's largest retail bank control of the Tuscan lender. Lovaglio's counter-strategy is designed to increase MPS's scale and weight within the country's banking system, making it a more formidable competitor and potentially less attractive as a takeover target.
Two-front strategy
The first offer targets Banco Bpm, Italy's third-largest bank, whose shareholder base includes French banking group Crédit Agricole with a significant stake. The MPS bid has not been agreed with Banco Bpm's management, adding a fresh layer of complexity to an already intricate shareholder battle. Crédit Agricole declined to comment on the MPS board's decision, according to Italian news agency Ansa.
The second offer is aimed at Banca Generali, the asset management arm controlled by Assicurazioni Generali, the insurance giant based in Trieste. This transaction is separate from the Banco Bpm bid and would give MPS a foothold in wealth management, a sector that has become increasingly important for Italian banks.
Neither Banco Bpm nor Banca Generali has issued an official response to the MPS board's approval.
Political reactions
The unfolding banking drama has drawn sharp political reactions in Rome. Deputy Prime Minister and League leader Matteo Salvini defended MPS, calling it a symbol of Italian industriousness and stressing the need to protect its history, autonomy and staff. In a statement, Salvini claimed credit for the League's role in rescuing the bank during the 2017 bailout, saying: "We enthusiastically took part in the rescue of Monte dei Paschi, one of the new government's first measures, restoring lustre to a historic name that had become a symbol of mismanagement by the left in Tuscany. Seeing it return to centre stage in Italy's economy is a success of which, as the League, we can only be proud."
Opposition politicians, however, accused the government of overstepping its role. Italia Viva senator Ivan Scalfarotto called the executive's involvement "absurd and inexplicable", noting that it had intervened both in the UniCredit–Banco Bpm talks and in Intesa's Opas on MPS. "We have reached the point of madness, whereby in just a few months the government has gone on the attack against both CEOs of the two most important banks in the country," Scalfarotto said. "We are not cheerleaders, we believe in the market: the numbers are what counts, let the best win."
He added: "We are not concerned about the future of Orcel, Messina, Lovaglio or Donner; what matters to us is that the government stays out of these games. We are calling for government neutrality, and yet once again Meloni's people are forcing their way into financial battles from which they should stay away."
Market reaction
Investors responded cautiously to the news. Milan's Piazza Affari edged up 0.35% on Thursday, with MPS shares gaining 1.05% and Banco Bpm rising 0.21%. Banca Generali, controlled by the Lion of Trieste, advanced 2.08%, while Intesa Sanpaolo added 0.90% and Generali rose 0.61%. Unipol, which has a pact with Intesa linked to the Opas on MPS, fell 1.97%.
The dual-offer strategy marks a bold attempt by Lovaglio to reshape Italy's banking landscape. If successful, it would create a group with significant scale in both commercial and wealth management, potentially altering the balance of power among the country's major financial institutions. However, the offers face significant hurdles, including regulatory approvals and the reaction of target shareholders. The coming weeks will be crucial as the battle for control of Italian banking intensifies.
