Italian bank Monte dei Paschi di Siena announced Friday it was launching a 13.3 billion euro ($13.9 billion) takeover bid for larger peer Mediobanca in a surprise move that could reshape the country’s banking sector. The offer values shares in investment bank Mediobanca at 15.99 euros each, a 5% premium on their closing price Thursday.
Monte Paschi, Italy's oldest bank, has a market capitalization of about 9 billion euros, while Mediobanca’s market value is about 12.7 billion euros. Under the terms of the offer, Mediobanca investors would receive 23 shares in Monte Paschi for every 10 Mediobanca shares they hold.
Monte Paschi said in a statement it expected the tie-up to generate 700 million euros a year in pre-tax synergies. The Tuscan bank added that the deal “aims to deliver significant profitability levels and to maintain a solid capital position.”. Shares in Mediobanca jumped on the news of the buyout offer on Friday morning. rising by 6.5% as of 11 a.m., while Monte Paschi shares were down by around 4%.
The buyout offer comes after the Italian government moved to re-privatize the once-troubled bank whose largest shareholder has been the Treasury since an expensive bailout in 2017. It introduced new shareholders in November that include Delfin, the holding company controlled by the family of late billionaire Leonardo Del Vecchio, and Roman tycoon Francesco Gaetano Caltagirone.
