The offers launched by the Monte dei Paschi on Banco Bpm and Banca Generali have “irrevocable nature” and therefore they will continue even in the event of the takeover bid Intesa Sanpaolo be successful before their conclusion. MPS wrote it in black and white, responding to the request for additional information from the ConsobA lengthy note in which the bank led by Luigi Lovaglio details the characteristics of both operations: from prices to synergies, up to the industrial rationale.
MPS: "Irrevocable offers, we'll go ahead even if Intesa wins."
The fate of the offers launched last August 21st for Banco BPM and Banca Generali does not depend on Intesa Sanpaolo. Indeed, the completion of the Ca'de Sass takeover bid and the consequent potential change in control of MPS "would not, in and of themselves, determine the decay, the ineffectiveness or the right to revoke the offers promoted by MPS", writes Siena, according to which the following would remain subject to the conditions set out in the offer documents, the related rights of modification or waiver within the permitted limits and the prerogatives of the supervisory authorities. Among the conditions of effectiveness indicated in the offers, in fact, there is not the “failure to complete” the takeover bid Intesa, the Sienese bank further specifies. And this is precisely one of the key points of the lengthy note sent by MPS to the Authority headed by Guido Stazi.
MPS: "Discounted offers at June 5th prices"
Another crucial point of the information concerns the prices offered by Monte dei Paschi. At Consob's request, Siena is using as a reference not the prices of August 19th, the last available price before the launch of the two takeover bids, but those of June 5th, the last day before the announcement of Intesa's takeover bid, which affected the price of MPS shares and therefore also the exchange rates offered by the Tuscan institution.
Well, based on the values of June 5th, the offer on Bpm bank presents an 8,1% discount, which rises to 10,4% if we look at the average of the previous twelve months. For the offer on Banca Generali's discount is more modest, between 3,2% and 7,9% depending on the time horizon considered. MPS also provided, despite not having been requested by the Authority, the data updated to September 11, which instead shows an implicit premium of 3,4% over Banco and 12,8% over the institution led by Gian Maria Mossa.
The synergies
Overall, Monte dei Paschi estimates 1,8 billion in synergies annual operating schedule and 1,9 billion in costs of one-off integration. As regards the Bank, MPS estimates 1,4 billion annual operating costs, including €1 billion in cost synergies, primarily attributable to the overlapping of central functions and technology platforms, and €400 million in revenue synergies, resulting from cross-selling and the broader product offering made available through the commercial networks of MPS and Banco BPM. The one-off pre-tax integration costs related to the transaction are estimated at approximately 1,5 billion.
In the case of Banca Generali, the estimate speaks of 400 million annual pre-tax run-rate synergies, of which €200 million in cost synergies and the same amount in revenue and funding synergies, compared to €400 million in integration costs.
MPS: "We will not close Banco BPM branches."
The marriage with Banco Bpm will lead to the creation of a combined group with total assets of 448 billion euros, customer loans of 243 billion, direct deposits of 299 billion and total financial assets of 693 billion, predicts Rocca Salimbeni who, detailing the industrial rationale of the offer on Piazza Meda, dismisses the possibility of a split-up: "no branch closures are foreseen connected to the operation, – writes MPS – except for any interventions required following the antitrust assessments, which the bank in any case considers limited given the complementarity of the distribution networks”.
Likewise, “it is not foreseen any rationalization of Banca Generali's consultancy networks. Indeed, the takeover bid launched on the institution "has an add-on logic aimed at protecting the complete business autonomy of Banca Generali and in particular of the network of financial advisors, a distinctive element of the franchise," concludes MPS.
