Ps attempt to climb to MediobancaThe aim is to control the Generali, until now engaged in the alliance with French from Natixis. And the Meloni government "blesses" the attack with its gaze turned towards the third pole. A real earthquake at the top levels of Italian finance with repercussions on the dynamics of the banking world, starting from the moves of Andrea Orcel on Banco Bpm. And so, after a series of rumours, the green light is now official: the board of directors of Banca Montepaschi di Siena has said yes to the launch of avoluntary public exchange offer on all Mediobanca shares.
In 2007, with Antonveneta, things went badly for MPS. With the new attempt, and in a completely different scenario, Siena has already called for the April 17, 2025 its Shareholders' Meeting with, on the agenda, the resolution on the capital increase to service the offer itself. An operation that, subsequently, could start between June and July.
The CEO of Mediobanca, Albert Nagel, would have already branded it as an "unconcerted and hostile operation". It is certainly a move (defined as "not boring" and "outside the usual patterns and rituals" by the CEO of MPS, Louis Lovaglio), which heralds a major upheaval in the structure of Italian finance, shifting the balance of power control of Generali (whose 13% is in the hands of Piazzetta Cuccia) and shuffling the cards of the banking risk. Lovaglio also made it known that the Ministry of Economy and Finance "has not placed any limits" on the takeover.
Mps and Mediobanca, the shareholding: axes and connections
MPS's offer on Mediobanca highlights numerous shareholding connections which reach up to Generali, with possible chain effects.
For example, just recently Dolphin, the holding company of the Del Vecchio family, had risen to 9,78% of MPS's capital (from the previous 3,5%) with an investment of approximately 800 million following the progressive sale, by the Treasury, of shares of the Sienese bank. Delfin's move was aimed at shielding MPS and strengthening the Italian "hard core" after the fall of the mef which, however, remains the leading shareholder with 11,7%, followed by Del Vecchio's safe with 9,78%, from Bpm bank with 5%, from Francesco Gaetano Caltagirone with the 5,026 and from Anima with 4 percent. It is worth remembering that Bpm has, in turn, launched a takeover bid on Anima.
The shareholders – underlines the note released today by Monte – they do not act in concert. Since the acquisition of the shares of the Sienese bank, the banking risk has become even more complex with theOps launched by Unicredit on Banco Bpm.
THEaxis Dolphin-Caltagirone, however, also constitutes the most important block among Mediobanca shareholders: Dolphin, in fact, is the first shareholder of Piazzetta Cuccia with 19,8%, Caltagirone second with 5,5%: all things considered, together they hold 25,3% of the investment bank. The third shareholder is Blackrock with 4,23 percent.
Il consultation agreement, instead, groups together 11,40% of the shareholders: Mediobanca, in fact, is led by a group of companies linked by a "consultation agreement". They include: the Mediolanum group (3,49%), Fin.Priv (which includes Generali, Italmobiliare, Pirelli, Stellantis, Telecom and Unipol), Monge, the Gavio group, Finpog Italia (Doris group), the Ferrero group, the Luchini group, the Pecci group, and with even smaller shares Tosco-Fin, Smil, Plt Holding (Tortora family), Fin.Fer (Pittini group), Vittoria Assicurazioni, Mais, Valsabbia Investimenti and Romano Minozzi.
Mediobanca is also the most important shareholder of Generali, with 13,10% of the capital. The Del Vecchio/Delfin group follows with 9,93, the Caltagirone group with 6,92% and the Benetton group with 4,80 percent.
Mps-Mediobanca, the exchange ratio
Il exchange ratio was set at 2,300 newly issued MPS shares for each existing Mediobanca share, which entails an implicit offer price of 15,992 transactions, and a premium of 5,03% compared to the official prices of 23 January 2025. The total consideration is 13,3 billion euros.
Mps-Mediobanca, the details of the operation
According to what MPS communicates in a note, the acquisition of Mediobanca will allow MPS to generate a return on tangible capital of approximately 14%, to have a pro-forma capital strength indicator of approximately 16% and to generate approximately 700 million in pre-tax synergies per year, of which 300 million from revenue, 300 million from costs and 100 million from funding.
The transaction will allow you to benefit from the value of Dta (deferred tax assets) of Mps, leveraging a higher consolidated tax base. The new group will, in fact, be able to accelerate the use of 2,9 billion euros of Dta over the next six years, with 0,5 billion per year and a significant capital benefit.
The “estimated net present value for the benefit of Mediobanca shareholders adhering to the offer” generated by the acceleration in the use of the DTRAs amounts to “approximately 1,2 billion euros, equal to approximately 10% of the current market value of Mediobanca”.
Mps, here's what CEO Lovaglio said in the note
“With this industrial operation we want to mark a new approach in the banking sector consolidation path which in an innovative way creates value immediately for both the shareholders of Mps and Mediobanca, and I believe also for the entire country system. We are aiming for a new national champion, with two brands of excellence, which we want to protect and enhance even more". Thus the CEO of Mps, Louis Lovaglio, in the note in which the bank announces the offer on Mediobanca.
From the union between the “oldest bank in the world still in operation” (its birth is dated 1472) and Mediobanca will be born “a new and modern highly competitive banking group. Together and benefit of all shareholders, we have the opportunity to create a player with a best-in-class and resilient global banking model, leveraging distinctive and complementary skills, widespread distribution networks and agile digital platforms. A unique business combination of talent, know-how, brand and values”.
Mps, what CEO Lovaglio told analysts
In the morning, the CEO then replied to the analysts' questions, doubtful about a combination between a commercial bank has always been investment bank. Among the answers provided, one concerns the role of the Treasury in the affair, since doubts have also been raised by the opposition to the government regarding the transparency of market operations in the credit sector where the state is the largest shareholder of a bank – Mps – and, as such, cannot fail to be a relevant part of the decision.
In this regard, Lovaglio declared that the Ministry of Economy has not "set any limits" to the Mediobanca deal and already “in December 2022, after completing the capital increase of 2,5 billion, to be precise on December 16, I met the Minister of Economy (Giancarlo Giorgetti, ed) to present an update on the strategies for the future and illustrated three options: to continue alone, to do a deal between peers and a deal with Mediobanca. Now is the best time,” he explained.
And again: “I want to be clear, we will protect both brands” and “we do not expect the Mediobanca brand to disappear”, which will have to continue “to attract the best talents” to allow Piazzetta Cuccia “to concentrate even more on its activity M&A and to the typical activities of an investment bank, which is Mediobanca's DNA".
The CEO of MPS does not exclude, however, that some Mediobanca bankers may leave Piazzetta Cuccia following the acquisition of Mps. “There may be impacts on revenues, because we will lose talent, I have seen many bankers who are leaving their banks, it is also a natural issue,” Lovaglio said. “We are also considering a negative impact on revenues but it will be marginal compared to the combination of the retail business” in consumer credit and asset management.
Last but not least, a passage on the dividend 2024: “We are not changing the payout ratio (the percentage of profit allocated to dividends) for 2024, it is a commitment we have made to shareholders and we are keeping our promises”.
Mps, with Mediobanca the dividend will reach 100% of the profit
The integration between MPS and Mediobanca “is expected to bring significant benefits to shareholders of both banks” through the distribution of a “sustainable and growing” dividend per share. In particular, MPS’s note on the offer states, “a double-digit increase” in adjusted earnings per share is expected, as well as “organic capital generation higher than net profit that allows for a growing” dividend per share “with a pay-out ratio”, i.e. the percentage of profit distributed in the form of dividends, "up to 100% of net profit, while maintaining a strong financial solidity”. As for the integration costs, they are “equal to approximately 600 million euros before taxes, to be sustained in the first year of activity”.
Mps, the conditions for the offer
Among the conditions to which the public exchange offer of MPS on Mediobanca is subject is the achievement of 66,67% of the capital of Piazzetta Cuccia. This can be read in the press release in which Monte announced the operation. The condition of effectiveness, like the others set by MPS, can be waived "only expressly" by the bank.
Mps: benefits from Generali's cash flows
Thanks to the acquisition of Mediobanca, Mps will become an "operator that benefits from sustainable cash flow, resulting from the insurance investment". This can be read in the MPS note on the offer for Mediobanca, which – we still remember – holds 13% of Generali, whose rich and stable dividends feed the financial statement of Piazzetta Cuccia.
Mediobanca: with Ops goodbye to Piazza Affari?
MPS's offer on Mediobanca would also lead to a farewell of Piazzetta Cuccia to Piazza Affari? The question is circulating insistently. A possible answer is contained in the press release issued by MPS: "The objective of the offer - it says - is to acquire the entire share capital of the issuer and achieve the delisting of Mediobanca shares from Euronext Milan. It is believed, in fact, that the delisted promote the objectives of integration, creation of synergies and growth between MPS and Mediobanca”.
Mps-Mediobanca: what's happening on the stock market?
The diverging trend of the Mediobanca and Mps shares at Piazza Affari, during the morning of Friday 24th January, with the former rising and the latter falling dramatically, transforms the 5% premium at the time of the announcement of the takeover bid into one offer discount compared to stock market prices. The 2,3 shares that MPS (6,62 euros each) offers for each Mediobanca share are worth - in the first part of the session - 15,226, compared to the 16,28 euros that Mediobanca quotes on the stock market. In this first phase, the market is asking Siena for a raise of almost 7%, which, compared to the counter value of the offer (13,3 billion), translates into a figure equal to approximately 920 million euros.
Mediobanca, what possible defense?
To defend itself from the MPS offer, Mediobanca's management will have to deal with two obstacles: passivity rule, which requires Alberto Nagel and his associates to bring any extraordinary transaction to the meeting, and the presence in the capital of Piazzetta Cuccia of Delfin and the Caltagirone group, which together have 25% of the capital of the bank led by Nagel and whose representatives on the board of directors of MPS approved the non-agreed operation launched by Monte. Piazzetta Cuccia, however, could also ask for help from a White knight.
(Article updated at 12.10)
