In the last twenty-four hours, the Italian banking landscape has experienced one of the most sudden and radical turning points in its recent history, adding a new important chapter of banking risk. What seemed like the start of negotiations for a “merger of equals” led by Banco BPM on Banca Monte dei Paschi di Siena (MPS) has turned into a competitive arena with no holds barred.
With the markets closed, the bank led by Piazza Meda broke the deadlock by proposing an agreed aggregation to create the second banking group in the country. However, the response of the competitors was not long in coming: with an emergency call during the night, the board of directors of Intesa Sanpaolo approved a sensational counter-offensive, launching a voluntary and totalitarian Public Purchase and Exchange Offer (OPAS) on the Sienese bank.
The financial details of Intesa Sanpaolo’s takeover bid
The ace dropped on the table by Ca’ de Sass puts an impressive sum on the plate, equal to approximately 30.6 billion euros in case of full membership. The offer is structured in mixed form (shares and cash): for every 10 Monte dei Paschi shares tendered, Intesa offers 1.6 Intesa ordinary shares newly issued ed 1 euro cash for each MPS title.
This financial architecture values Monte’s shares at 10,091 euros, guaranteeing shareholders a premium of 12.5% compared to the last official closing price and going up to over 17% if compared to the average of the last few months. The declared objective of the group led by Carlo Messina is to create a European giant with a capitalization of 126 billion euros, accelerating its leadership in the private banking and wealth management sectors.
The “Real Prize”: Mediobanca and the fort of Trieste
Behind the colossal architecture of the operation there is not only territorial expansion, but a strategic design of superior caliber. In fact, within the scope of the acquisition, Intesa Sanpaolo aims to firmly maintain control of Mediobanca (recently entered the orbit of Siena) and its historic brand. The acquisition of Piazzetta Cuccia brings Intesa a key share of Assicurazioni Generali, allowing the largest Italian bank to extend its influence on the “Lion of Trieste” and its almost 800 billion euros of managed savings. In fact, Intesa will retain approximately 625 MPS branches and investment banking activities, guaranteeing its balance sheet 80% of the combined net profit deriving from the MPS-Mediobanca hub.
The strategic agreement with Unipol and the spin-off of the branches
To nip in the bud the rigid regulatory constraints regarding Antitrust and concentration of the retail market, Intesa Sanpaolo simultaneously signed a binding agreement with the group Unipol Insurance. The agreement provides for a radical restructuring plan and a spin-off of assets quantifiable between 3 and 3.5 billion euros by cash. Unipol will acquire an independent banking legal entity into which approximately 635 branches of MPS, equipped with all the central structures, assets and liabilities necessary to operate autonomously.
This door block will be merged with Bper Bank (controlled by the Bolognese insurance group), massively expanding the latter’s presence in Central-Northern Italy. The move allows Unipol to collect the historical legacy of the Sienese commercial network and to create, in combination with Bper, a new entity called Banca Monte Paschi, which will effectively position itself as the second national banking operator in terms of branch coverage.
Banco BPM’s failed proposal: the faded alternative
The arrival of the Milan-Bologna axis has effectively overshadowed the project formalized only a few hours earlier by BPM desk. The Milanese bank had proposed an integration to Siena that would safeguard the territorial identity and historic brands, estimating annual gross synergies of more than 1.1 billion euros and an overall increase in value of 5.5 billion. The Piazza Meda plan aimed to leverage the strong complementarity in key regions such as Lombardy, Veneto and Tuscany itself. However, the complexity of Intesa Sanpaolo’s counter-proposal – strong in an immediate liquid component and a perimeter extended to major maneuvers on Mediobanca and Generali – inevitably shifts the needle, forcing the MPS board of directors to redesign its roadmap.
Future scenarios and the rebirth of the “Banca Monte Paschi” brand
The fate of the oldest credit institution in the world is now at a formal crossroads, but the path traced by the Intesa-Unipol agreement outlines an unprecedented structure. If the takeover gets the definitive green light from the shareholders (the extraordinary meeting of Intesa is already set for next 10 September) and the supervisory authorities (ECB and Antitrust), there will be a real split in the Italian banking landscape. On the one hand, the heavy core of revenues and business finance will pass under the banner of Ca’ de Sass; on the other, the retail network acquired by Unipol will keep the banner of tradition high. The spin-off will in fact give life to a new and autonomous commercial banking reality which will preserve the historic brand, relaunching the name of Monte Paschi Bank. A solution that promises to safeguard employment levels in the area, while definitively closing the era of the public bank and completing the risk of Italian credit.
