Takeover of Mediobanca, Montepaschi launches a 13.3 billion exchange offer. Piazzetta Cuccia, "will be considered hostile"

The board of directors of Banca Montepaschi di Siena has approved the launch of a voluntary public exchange offer on all Mediobanca shares. The offer remains conditional on obtaining the relevant regulatory authorizations and on the conditions indicated in the communication which will be further specified in the offer document. The exchange ratio was set at 2,300 newly issued MPS shares for each existing remedy bank share, which entails an implicit offer price of 15,992 transactions, and a premium equal to 5.03% compared to the official prices of 23 January 2025.

The total consideration is 13.3 billion euros. The success of the offer will allow an acceleration in the use of the DT obtained from MPS with an estimated net present value of €1.2 billion for the benefit of Mediobanca shareholders adhering to the offer, equal to approximately 10% and the current value of Mediobanca. MPS expects the execution of the public exchange offer on Mediobanca to be completed by the third quarter of 2025. The Sienese institute estimates that the new banking group, with the takeover bid on Mediobanca, will be able to benefit from pre-tax synergies of around 700 million euros per year, of which around 300 million represented by revenue, around 300 million cost and around 100 from funding.

MPS has called an extraordinary shareholders’ meeting for April 17th to decide on the capital increase to service the public exchange offer on Mediobanca. The institute announced this by specifying that it will issue 2,300 newly issued shares, the entire consideration offered to Mediobanca shareholders.

The offer aims to create a new national champion in the Italian banking sector, which ranks third in key business segments, through the industrial combination of two of the main players in the sector: MPS in retail commercial banking and Mediobanca in wealth management, corporate investment banking and consumer credit. MPS made this known in the note on the launch of the Ops on Mediobanca. The business combination, according to MPS, will make it possible to expand the offering of products and services and strengthen the ability to support investments, through a synergistic banking model and by leveraging the strengths, distinctive skills and excellent human capital of the two organizations . MPS’ offer for Mediobanca is also “an opportunity” that would allow “the creation of the third national banking operator, with a distinctive, diversified and resilient business model, which will leverage the combination of two of the most prestigious brands in the financial sector Italian, with distinctive and complementary capabilities”.

Regarding MPS’s offer for Mediobanca, the Sienese institute specifies that “there are no people acting in concert with the Offeror”. Francesco Gaetano Caltagirone is a shareholder of both Mediobanca (5.499%) and MPS (5.026%). Delfin, owned by the Del Vecchio family, is a shareholder of Mediobanca (19.390%) and also of MPS (9.780%).

MPS public exchange offer for Mediobanca “was not agreed upon” and will therefore be considered “hostile”. This is what we learn from financial sources.

Lovaglio, “we are aiming for a new national champion with two brands”

“With this industrial operation we want to mark a new approach in the path of consolidation of the banking sector in an innovative way creates value immediately for both MPS and Mediobanca shareholdersand I also believe for the entire country system”. This was stated by the CEO of Monte dei Paschi di Siena, Luigi Lovaglio, after the launch of the Ops on Mediobanca. “We are aiming for a new national champion with two brands of excellence – he adds – which we want to protect and enhance even more. A new, modern, highly competitive banking group, leader in key specialist businesses and with strong financial strength, which aims to play its role of supporting families, businesses and local communities in an increasingly virtuous manner”.

The one between MPS and Mediobanca “it is the best industrial business combination” possible“an incredible strategic opportunity” that will create “value for the shareholders of both organizations – said the CEO of MPS, Luigi Lovaglio, during the call with analysts to illustrate the Sienese bank’s Ops for Piazzetta Cuccia. -. The two brands of MPS and Mediobanca will maintain their unique skills and positioning. Mediobanca is the best counterpart that presents itself in the best period for a strong and unique business combination.” As regards the timing of MPS’s takeover bid for Mediobanca, “today there is the announcement of the operation”, then the presentation “of the offer document in February”, then the shareholders’ meeting on 17 February for the capital increase, while “between June and July we expect to receive the authorizations” from the Authorities “and the start of the exchange period”, to conclude the operation within the third quarter of the year, Lovaglio specified.

“In December 2022 – Lovaglio continued – after completing the 2.5 billion capital increase, to be precise on 16 December, I met the Minister of Economy to present an update on strategies for the future and illustrated 3 options : continue alone, do a peer-to-peer operation and an operation with Mediobanca. Now is the best time.”