The board of Banca Monte dei Paschi di Siena, one of Italy's oldest banks, on Friday formally set out the financial terms of two voluntary public exchange offers for all the shares in Banco BPM and Banca Generali.
The combined proposal is worth around €34 billion and stands as a direct alternative to the takeover bid or Opas — a public offer combining cash and shares — launched by Intesa Sanpaolo for the same Siena-based bank. Monte dei Paschi di Siena's own offers are structured as Ops or share-only, with no cash component.
The Banco BPM offer carries a total consideration of €25.3 billion, with an exchange ratio of 1.567 Monte dei Paschi di Siena shares for each share tendered. The Banca Generali offer is worth €8.72 billion, with an exchange ratio of 6.958 Monte dei Paschi di Siena shares. Together, the deals are designed to deliver immediate value creation and strengthen the shareholder base of the new group.
Lovaglio eyes European scale
The Monte dei Paschi di Siena bid follows an attempted takeover of the Siena bank by Intesa Sanpaolo, Italy's largest banking group, in partnership with Unipol and Bper Banca.
Because of this bid, Monte dei Paschi di Siena must comply with the passivity rule — a takeover-defence regulation that bars a target company from actions that could frustrate a bid, such as its own acquisitions, without shareholder approval.
Shareholders therefore gathered for an extraordinary general meeting on Thursday. The largest are the Del Vecchio family (17.5%), the Caltagirone group (10.2%), the BlackRock fund (5%), the Ministry of Economy and Finance (4.8%) and Banco BPM (3.7%).
This could reshape not just Italy's banking system but Europe's too, given that France's Crédit Agricole holds almost a third of Banco BPM's share capital.
The combined group made up of Monte dei Paschi di Siena, Banco BPM and Banca Generali would have "a pro forma market capitalisation of around €80bn, ranking among the top ten European banks and in second place in Italy for customer loans and branch network," the bank's chief executive Luigi Lovaglio said on a call with analysts.
"We are creating a stronger Italian group of European relevance, rooted in the national economy and ready to compete in a constantly evolving sector," he said, describing it as a "friendly, non-hostile combination" because "we are convinced of the strength of this project".
The battle over Italian banks is far from separate from politics. The Meloni government has backed Monte dei Paschi di Siena's strategy of building a third banking pole alongside Italy's two dominant lenders, Intesa Sanpaolo and UniCredit — first by selling part of the state's stake in the bank to private shareholders in 2024, then by welcoming Monte dei Paschi di Siena's acquisition of Mediobanca a year later while opposing UniCredit's attempt to take over Banco BPM.
The prospect of Monte dei Paschi di Siena falling under Intesa Sanpaolo's control has also been opposed by institutions in Siena and Tuscany, worried that a large share of its branches could be transferred to Unipol-BPER, Intesa's partner in the deal, and that jobs could be cut at the historic Tuscan bank.
Deal terms and structure
The acceptance period for the two offers may "start in the first half of December 2026 and end in the first half of February 2027," according to the transaction document.
Based on the estimates in the company release, completion of the deal will reshape the ownership balance within the new financial entity.
If both exchange offers are fully taken up, the relative majority stake will remain with Mps's historic shareholders, who would hold around 50.1% of the combined group.
The stakes allocated to Banco BPM and Banca Generali shareholders — extinguishing their independent presence — would be 37.2% and 12.7%, respectively.
Monte dei Paschi di Siena's strategy also includes "a significant improvement in profitability and operating efficiency," with €15 billion in dividends payable over 2026-2030, alongside an extraordinary distribution totalling €4 billion to shareholders, paid partly in cash and partly in kind through shares.
