According to reports from Bloomberg, Intesa Sanpaolo SpA announced that its offer for Banca Monte dei Paschi di Siena SpA will lapse if Paschi shareholders approve either of CEO Luigi Lovaglio's proposed bids for Banco BPM SpA and Banca Generali SpA at the scheduled October 29 meeting. The Italian bank has strategically increased the cash component of its offer by 25 euro cents ($0.28) per Paschi share, making it conditional on shareholders rejecting Lovaglio's competing transactions. In the latest statement, Intesa Sanpaolo clarified that 'in the event that the MPS shareholders' meeting approves one or both of the public takeover bids (and the related capital increases) or the voluntary reduction in share capital, intended to enable the extraordinary distribution, it will not exercise its right to waive the conditions for the OPAS to take effect and will invoke their non-fulfilment, with the consequence that the public takeover and exchange offer itself will become definitively ineffective'. If the Lovaglio plan is fully rejected, Intesa Sanpaolo will increase the cash component by 25 euro cents per MPS share, bringing the total monetary value to €31.4 billion, comprising €27.6 billion in shares and €3.8 billion in cash.
As reported by Bloomberg, Intesa Sanpaolo CEO Carlo Messina surprised markets in June by offering to acquire Monte Paschi in a deal designed to strengthen the bank's dominant position in Italy and expand its wealth and investment banking operations through the addition of Mediobanca SpA. The proposed transaction would also leave Intesa with a large minority stake in Assicurazioni Generali SpA, the country's biggest insurer. The bank has pledged to sell approximately half of Paschi's branches to Unipol Assicurazioni SpA to address potential antitrust concerns. In its latest statement, Intesa Sanpaolo emphasized that its OPAS 'offers no premium, but is 'at a discount for the shareholders of the target companies and involves a complex structure characterised by elements of uncertainty, challenging synergies and execution risks', contrasting it with the Lovaglio plan which it claims lacks transparency and certainty.
According to Bloomberg, while Monte Paschi's board hasn't formally rejected Intesa's offer, it has raised concerns about the price and the plan to divest a substantial portion of its assets. In response to Intesa's bid, Lovaglio announced the two separate bids in August to fend off the takeover attempt. The move has triggered the so-called passivity rule under Italian law, meaning Lovaglio needs support from at least two-thirds of the votes cast to proceed with the transactions. Intesa's latest move effectively undermines the very structure of the transaction, stipulating that 'none of the three points of the plan must be approved' for the takeover bid to remain effective, dealing a significant blow to Luigi Lovaglio's comprehensive plan.
As reported by Bloomberg, Intesa has structured its offer with an exchange ratio that will be adjusted upward if the bank distributes an interim dividend for 2026. This mechanism allows for potential price adjustments based on the bank's financial performance during the offer period. The increased cash component represents Intesa's preemptive strategy to counter Lovaglio's higher price demands while maintaining its position as the primary acquirer. The bank has clarified that the exchange ratio announced in June will be adjusted in the event of the distribution of the interim dividend for 2026, providing flexibility for potential price adjustments based on the bank's financial performance.
