Monte dei Paschi tries to respond to the assault from Intesa Sanpaolo. The board of directors of the Sienese bank has given the green light to CEO Luigi Lovaglio’s plan, which includes two separate exchange offers on Banco Bpm and Banca Generali. A double operation with which the Sienese bank attempts to build an industrial alternative to the 30.6 billion euro takeover bid launched by Intesa on MPS.
The board of directors, called to examine the extraordinary operations designed by Lovaglio with the support of the advisors UBS and Bank of America, concluded on the afternoon of Thursday 20 August. The green light thus opens a new phase in the battle around the historic bank of Siena.
Lovaglio’s plan against Intesa San Paolo’s takeover bid
The strategy approved by the board includes two separate offers, one addressed to Banco Bpm and the other to Banca Generali. The objective is to strengthen MPS and offer shareholders an alternative path to the operation promoted by Intesa Sanpaolo.
The plan represents the most important response put on the table so far by Lovaglio to counter the takeover bid. A particularly ambitious move because MPS, while itself the subject of an offer, is simultaneously trying to go on the offensive against two other protagonists of the Italian financial system. Approval of the project, however, was not unanimous.
The split in the MPS board of directors
Both operations were in fact approved by a majority, with the abstention of four independent directors. According to sources close to the dossier, the independents believed they had not been adequately informed to be able to express a complete assessment.
Among the points on which they would have asked for more information were in particular the risks linked to the integration process and the synergies envisaged by the operations.
The vote would thus have revealed a split within the council, after already in the previous days several members had expressed doubts about Lovaglio’s management of the dossier, deemed too personalistic.
Tensions also emerged in the final phase of the meeting. The reasons expressed by the independent directors to explain their abstention were in fact not included in the statement approved by the board. The same directors who abstained on the operations would therefore have voted against the text.
Banco Bpm and Banca Generali go up on the stock exchange
The market reaction to MPS’s double offensive was immediate. After the news of the green light from the board of directors, Banco Bpm and Banca Generali accelerated in Piazza Affari.
Banca Generali managed to gain 1.7%, rising to 68.5 euros, while Banco Bpm recorded an increase of 1.4% to 24.19 euros, with the Ftse Mib rising by 0.2%.
MPS, on the other hand, was weaker, with initial reactions to the news showing a decline of 0.4%, while Intesa Sanpaolo remained in positive territory with an increase of 0.4%. Unipol fell, losing 2.9%, while Generali recorded an increase of 0.2%.
With the green light from the council, the game around Monte dei Paschi therefore enters a new phase: Lovaglio tries to respond to Intesa’s takeover bid by transforming Mps from the target of the operation to the protagonist of a double offensive on Banco Bpm and Banca Generali.