MPS flags uncertainties around Intesa Sanpaolo's improved bid

what happened

According to Newsmetry API, Italian lender Monte dei Paschi di Siena (MPS) said on Monday that Intesa Sanpaolo’s improved takeover offer leaves its investors facing several uncertainties. The proposal also forces them to give up an alternative plan prepared by MPS.

On October 3, Intesa pledged to pay MPS shareholders an additional €800 million ($892 million) in cash if they rejected the bank’s counter-plan against Intesa’s €34 billion cash-and-share takeover bid. MPS CEO Luigi Lovaglio had urged investors to support the plan at an October 29 vote, even if they planned to accept Intesa’s offer later.

After Intesa’s ultimatum, major MPS investors representing one-third of the bank’s capital said they would reject the defence plan and accept the bid. That position means Lovaglio cannot secure the two-thirds majority required to prevail at the October 29 vote. The MPS board met on Monday to review the latest developments.

MPS said Intesa was asking shareholders to abandon an alternative despite there being no certainty that the takeover would proceed as expected or deliver the targeted returns. “MPS board and its management will continue to work in the interest of shareholders, evaluating and pursuing any initiatives to protect investors’ holdings and maximise their value,” the bank said. $1 = 0.8964 euros.

why it matters

The dispute adds uncertainty to the €34 billion transaction. Investor support for Intesa’s bid makes the October 29 vote difficult for Lovaglio, while shareholders weigh the extra cash against execution risks and the loss of an alternative plan.

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