A bidding war has erupted for Italy's Monte dei Paschi di Siena (MPS), the world's oldest bank, as Intesa Sanpaolo made an unsolicited offer of 30.6 billion euros ($35.3 billion) on Monday, aiming to outbid rival Banco BPM and create Europe's second-largest bank by market capitalization [1]. Intesa's proposal represents a 12.5% premium over MPS's closing share price on Friday, with MPS currently valued at 27.4 billion euros [1].
Banco BPM had previously announced on Sunday that its board unanimously approved expressing interest in a 'merger of equals' with MPS, though it provided limited details on the deal structure, stating only that both groups would have equal weight in the combined entity [1]. Intesa's move is a direct response to BPM's announcement, intensifying the competition for control of MPS [1].
MPS, which underwent a state bailout in 2017 and was re-privatized in 2023, has become a focal point for consolidation in the Italian banking sector, especially after its acquisition of Mediobanca last year, making it insurer Generali's largest investor [1]. France's Credit Agricole, the main shareholder of Banco BPM, expressed interest in exploring opportunities that could strengthen BPM, signaling support for the potential merger [1].
Market reaction was mixed: shares in Intesa and Banco BPM fell by 4% and 1.1% respectively, while MPS shares rose 0.9% in early Monday trading [1].
CONCLUSION
The bidding war between Intesa Sanpaolo and Banco BPM for Monte dei Paschi di Siena marks a significant moment in European banking consolidation. With substantial offers and strategic interests at play, the outcome could reshape the Italian and broader European banking landscape. Market participants responded with caution, as reflected in the share price movements.