Intesa Sanpaolo has increased its takeover proposal for Monte dei Paschi di Siena, escalating one of Europe’s largest current banking transactions as MPS shareholders approach a critical strategic vote.
Intesa added an €800 million, roughly $900 million, cash incentive for MPS shareholders if they reject an alternative acquisition strategy proposed by MPS Chief Executive Luigi Lovaglio, according to Reuters.
The revised Intesa proposal offers €1.25 in cash plus 1.6 newly issued Intesa shares for each MPS share.
The transaction was originally announced in June and is valued at approximately €34 billion, making it the largest deal in a wave of consolidation that has reshaped Italian banking during the past two years.
But MPS management is pursuing another path.
Lovaglio has proposed all-share acquisition offers for Banca Generali and Banco BPM. MPS shareholders are scheduled to vote on that strategy October 29.
Intesa has warned that approval of either competing acquisition could violate conditions attached to its offer and potentially cause the bank to withdraw.
That creates a clear decision point for shareholders.
They must weigh Intesa’s enhanced proposal against management’s plan to keep MPS independent while expanding through acquisitions of its own.
The contest also has broader implications for European banking.
Higher interest rates have strengthened profitability at many lenders while simultaneously increasing the importance of scale, capital efficiency and diversified revenue. Those forces have encouraged consolidation across fragmented national banking markets.
For investors, October 29 is now the critical date.
A rejection of the MPS expansion strategy would strengthen Intesa’s path toward completing the takeover. Approval could instead threaten the transaction and reopen the strategic future of one of Italy’s most closely watched banks.
