Italian insiders send bank M&A down messy path
21/08/2025 12:28
The author is a Reuters Breakingviews columnist. The opinions expressed are his own. By Liam Proud LONDON, Aug 21 (Reuters Breakingviews) - The M&A scrap over Italy’s Mediobanca MDBI.MI has ended, and CEO Alberto Nagel has lost. That’s the key takeaway from a shareholder vote on Thursday. Investors in the 17-billion-euro ($20 billion) lender effectively blocked a bid for Banca Generali BGN.MI, which formed a key part of Nagel’s defence against a hostile offer from 10-billion-euro Banca Monte dei Paschi di Siena (MPS) BMPS.MI. The only question now is whether MPS ends up raising the price for a deal with questionable financial logic. Nagel was fighting an uphill battle from the day the state-backed retail bank launched a surprise approach in late January. Close to 30% of Mediobanca’s stock, according to LSEG data, lies in the hands of the wealthy and politically connected Caltagirone and Del Vecchio clans, who alongside the Italian government also happen to be key anchor shareholders in MPS. That apparent alliance arguably has a common interest in the hostile merger, which would create a so-called “third pole” to rival local mega-banks UniCredit CRDI.MI and Intesa Sanpaolo ISP.MI while also facilitating greater control over insurer Assicurazioni Generali GASI.MI, in which Mediobanca owns 13%. Nagel concocted a defence strategy of sorts. It rested on buying 6-billion-euro wealth specialist Banca Generali, which is majority owned by the similarly named insurer. But he needed the permission of his own investor base to launch that offer, which proved impossible given the voting sway of MPS-affiliated billionaires and other local Italian players. The M&A aggressor, run by Luigi Lovaglio, will now almost certainly succeed with its share-based offer for Mediobanca. The absolute minimum take-up threshold for that bid is only 35% of the target’s stock. MPS effectively has almost 30% in the bag already by virtue of the Caltagirone and Del Vecchio families and can probably bank on more judging by the outcome of Thursday’s vote, in which 42% either abstained or opposed Nagel’s plan. Mediobanca’s share price, which is about 3% above the live value of the MPS equity-based offer, suggests investors are betting on a price hike. That may be necessary to avoid a messy scenario where Lovaglio gets stuck with little more than a third of the stock, potentially giving his bank de facto control but without the benefits of full consolidation. Those benefits include the ability to recognise some tax assets at a quicker pace, which MPS has said could boost its capital by up to 500 million euros per year. That would help to recover some value from a deal that otherwise makes little financial sense, given the scant overlap between the two sides. Many independent shareholders on both sides seem to dislike the combination: investors with 35% of Mediobanca stock favoured the Banca Generali deal. MPS shares, meanwhile, are up only 19% this year compared with around a 60% rise for the MSCI Italy Banks Index, suggesting that the market has a dim view of the planned merger. In other words, the Monte dei Paschi crew has won the tactical M&A battle but is still miles away from ultimate financial success. Follow Liam Proud on Bluesky and LinkedIn. CONTEXT NEWS Mediobanca said on August 21 that shareholders had denied authorisation for CEO Alberto Nagel’s proposed acquisition of wealth manager Banca Generali. Shareholders with about a third of the bank’s stock abstained from the vote, including a vehicle of Italy’s wealthy Del Vecchio family as well as local pension managers and the lender UniCredit. Investors with a tenth of the stock, effectively just the tycoon Francesco Gaetano Caltagirone, voted against the deal. That saw the total abstentions and oppositions reach 42% of Mediobanca’s equity, surpassing the 35% of shareholders who voted in favour of the deal. Buying Banca Generali was a key plank of CEO Nagel’s defence against a hostile bid from Banca Monte dei Paschi di Siena. Shares in Mediobanca were down 0.7% to 21.13 euros as of 1018 GMT on August 21. Monte dei Paschi’s hostile deal has seen its shares underperform https://www.reuters.com/graphics/BRV-BRV/zgpozzlxzvd/chart.png (Editing by George Hay; Production by Oliver Taslic) ((For previous columns by the author, Reuters customers can click on PROUD/liam.proud@thomsonreuters.com))