Too low a bid and too high a risk. If it's not a rejection, it's very close. According to the board of directors of Monte dei Paschi, the consideration offered by Intesa Sanpaolo – 30,6 billion euros, 3 billion of which in cash – offers a lower premium than the average of offers observed so far in the sector and brings with it "significant uncertainties", first and foremostat Generali's share which would end up in the belly of a competing group of the Lion of Trieste.
And Banco Bpm? In this case the door remains wide openThe merger proposal between equals (which are not equals given that Siena has a market capitalization of 35 million and Piazza Meda is 23) put forward by the bank led by Giuseppe Castagna deserves further investigation because it avoids the "disaggregation" of Rocca Salimbeni into two entities. But let's proceed in order.
MPS: Criticisms of Intesa's mega-offer
A month and a half after the maxi takeover bid launched by Intesa Sanpaolo with the support of Unipol and Bper, the board of directors from Siena states that will continue the evaluation of the offer "in a thorough manner, in compliance with its fiduciary duties and in the interest of all Banca MPS stakeholders, but in the meantime he doesn't skimp on criticism regarding the operation proposed by the institute led by Carlo Messina. The first concerns the price. The takeover bid, MPS recalls, incorporates a premium of 12,5% compared to the closing price of Siena shares on June 5th and 11,8% compared to the average price of the previous month on the same date. "This premium," the board of directors states, "appears lower than the average premium observed in comparable voluntary public purchase and/or exchange offers in the Italian banking sector, equal to approximately 30% compared to the official price on the day preceding the announcement and approximately 41% compared to the weighted average price over a one-month period." Not only that, to date, the offer is at a discount of 3,3% compared to the market price of MPS shares and 6,2% if the interim dividend that Intesa will pay in November is also considered in the calculation.
There are also doubts about the 2,9 billion in synergies estimates by Ca'de Sass, deemed too optimistic, and on the structure of the offer, composed mainly of Intesa Sanpaolo shares, to which is added a cash component equal to 1 euro for each MPS share. "The value of the equity component will remain exposed to price changes of Intesa Sanpaolo shares until the Offer is settled. Consequently, the implicit premium or discount for BMPS shareholders may vary over time, transferring to them market risk linked to the evolution of the price of the Offeror's shares", Siena writes in a note.
Antitrust risks and uncertainties surrounding Generali
On the Antitrust front, according to the bank led by Luigi Lovaglio, there are strong “elements of uncertainty” on the assessments that the authorities could make on the acquisition by Intesa of 13,2% of Generali held through Mediobanca, taking into account the "significant role played by both companies in the Italian market'life insurance', as well as "of the possible effects on competitive balances, on the governance structures and on the commercial and strategic dynamics of the subjects involved". Not only that, the Siena board also raises doubts on the participation in Leone for the purposes of Danish Compromise, because "a significant portion of the financial benefits proposed by the offeror, and, consequently, of the value creation hypothesis, appears to depend on regulatory requirements and complex structures that are currently unknown and will require scrutiny by the competent authorities; these regulatory requirements cannot, therefore, be considered established."
The offer also includes the sale of 635 branches and the MPS brand to Unipol, a perspective considered penalising in terms of valorisation, which brings with it the risk dismantling of the bank's historical identity.
Banco Bpm's merger proposal
In parallel, the marriage proposal between equals Bpm bank – which the CEOs of Intesa and Unipol Carlo Messina and Carlo Cimbri had called “a love letter” seems to have made an impact.
The board of directors believes that the "merger proposal received from Banco Bpm deserves a comprehensive and rigorous analysis, also because it foresees a possible industrial operation based on the valorisation of the entire perimeter of MPS and does not presuppose disaggregation of the Bank's activities, distribution network and brand".
