By Gianluca Semeraro
MILAN (Reuters) – Shares in Monte dei Paschi fell further on Tuesday as the board of Mediobanca gathered to discuss a surprise bid by the smaller rival, the latest move in a series of takeover tussles rattling Italian banking.
MPS announced a 13.3-billion euro ($13.9 billion) buyout bid for Mediobanca on Friday but the value of its all-share offer has declined because of investor scepticism over the planned combination.
MPS shares were down 1.6% by 0820 GMT, having fallen 2% on Monday and 7% on Friday. Based on the proposed exchange ratio, that entails a value of 14.735 euros for each Mediobanca share, which on Tuesday traded instead at 16.435 euros.
Based on Italian rules, the Mediobanca board can give formal advice to shareholders only once the bid’s prospectus is public, in a few months’ time.
However, the board is expected to make clear it does not view with favour a bid by a smaller rival which the state had to save from collapse in 2017.
In a letter to employees at the weekend, Mediobanca CEO Alberto Nagel said the offer had not been previously agreed and the bank would decide how to best protect the interests of its stakeholders.
MPS has returned to profit and dividends after receiving more than 10.5 billion euros in fresh cash between 2017 and 2022, which it has used to clean up its balance sheet and lay off thousands of staff to slash costs.
Favourable court rulings have also allowed it to release money set aside against legal risks.
The deal has the blessing of the Italian government which wants to see a third strong banking force emerge to compete with Intesa Sanpaolo and UniCredit.
An MPS stake placement by the state in November brought onboard as shareholders Francesco Gaetano Caltagirone and the holding company of late fellow tycoon Leonardo Del Vecchio.
The two are also the main shareholders in Mediobanca and Generali, Italy’s top insurer and a large holder of domestic government bonds.
($1 = 0.9528 euros)
(Writing by Keith Weir and Valentina Za; Editing by Emelia Sithole-Matarise)