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Milanese lender Mediobanca has rejected a takeover bid from rival Monte dei Paschi di Siena’s as “contrary to its interests” and value destructive.
Mediobanca’s board said in a statement after a meeting on Tuesday that the offer from the partially state-owned Tuscan lender lacked any “industrial and financial rationale”.
MPS, whose single largest shareholder has been the Italian state since a 2017 bailout, last week launched a €13.3bn takeover of its larger rival that would shake up Italy’s banking sector.
Under the terms of the all-share offer, which was priced at a premium of just 5 per cent to Mediobanca’s closing price on Thursday, investors in the Milanese bank would get 23 new MPS shares for every 10 Mediobanca shares they hold.
Mediobanca said that the structure of the offer was unattractive partly because it would be difficult to establish the intrinsic value of MPS shares. It cited billions of euros in non-performing loans and litigation risks at MPS as some of the factors that made a tie-up unattractive.
“Risk indicators are worse than those of other Italian banks with considerable retained losses and [a] marked concentration in terms of both geography, clients and product factories,” it said.
Italy’s Prime Minister Giorgia Meloni said at the weekend that the takeover, if successful, “would allow us to secure Italians’ savings”. But analysts’ reaction has been more negative. MPS shares have fallen 11 per cent since the bid was announced on Friday, while Mediobanca’s have risen about 4 per cent.
MPS has undergone a successful turnaround since a capital raising exercise in 2022 that enabled the state to progressively sell down its stake to 11 per cent.
In November, it sold large stakes to local investors, including the billionaire Del Vecchio family’s holding company, Delfin, and Roman building tycoon Francesco Gaetano Caltagirone. Both are also investors in Mediobanca.
“Mediobanca believes the offer has no industrial value, compromising [our] group identity and business profile, which is focused on high value-added business segments with clear growth trajectories,” it said in the statement.
Mediobanca has a strong wealth management and investment banking franchise which it said were priorities under its three-year business plan.
Analysts have also questioned the rationale for the deal, with some saying execution risks could overcome any upsides.
But some critics of the bank’s management have long criticised Mediobanca chief executive Alberto Nagel’s strategic priorities. They said the lender relies too heavily on dividends from its 13 per cent stake in insurer Generali, where it is the single largest shareholder.
Some in the industry see MPS’s move on Mediobanca as a way for the Italian government to extend its reach over the insurer, a critical investor in the country’s large public debt, after it entered an asset management joint-venture with France’s Natixis.
Meloni’s allies said that a deal between Generali and Natixis would jeopardise Italians’ savings.
