Italy’s deal magician hits limit of M&A escapology

Banca Monte dei Paschi di Siena SpA

30/10/2026 12:43

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Neil Unmack
LONDON, Oct 30 (Reuters Breakingviews) - Luigi Lovaglio has finally hit an M&A wall. The CEO of €33 billion Banca Monte dei Paschi di Siena BMPS.MI, who pulled off an audacious hostile takeover of Mediobanca, was on Thursday blocked by his own shareholders from a bid to buy two other banks. Lovaglio's defence against Intesa Sanpaolo's ISP.MI hostile offer is now in trouble, as are any lingering hopes for a more competitive third force in Italian banking.
The plan was always bold. Barely months into the integration of Monte dei Paschi and Mediobanca, €100 billion domestic giant Intesa stepped in with a bid that's currently worth nearly €10.8 a share. Using prices when the deal was announced, it’s a slim 15% premium.
Lovaglio’s countermove was to launch simultaneous offers for lending rival Banco BPM BAMI.MI and wealth peer Banca Generali BGN.MI, to fend off Intesa. It seemed politically astute: whereas Intesa’s deal would empower the country's largest bank, the Monte dei Paschi strategy sought to create a new €61 billion group. The three-way union could have been a serious "third pole" in Italian banking, something politicians have long desired. It would also have kept the world's oldest bank intact, whereas Intesa will have to break it up to assuage antitrust authorities.
Yet shareholders overwhelmingly rejected Lovaglio’s plan on Thursday. It was always a long shot: one powerful Monte dei Paschi investor, the investment vehicle of the Del Vecchio heirs, swung behind Intesa, as did tycoon Francesco Gaetano Caltagirone, who previously tussled with Lovaglio. They may have their own reasons, but it wasn’t just local powerbrokers who sank it: some 91% of votes at the meeting rejected the Lovaglio deals.
The plan carried risks. Lovaglio's proposed M&A targets, BPM and Banca Generali, had not openly embraced his overtures, raising the prospect of Monte dei Paschi having to pay up or fail to secure full control. Intesa CEO Carlo Messina also played a powerful card, by modestly raising his price and pledging to walk away if the shareholders approved the Lovaglio plan. That could have been a bluff, but Monte dei Paschi investors were clearly not willing to call it, even if doing so might have presented minimal downside.
What’s clear is that Monte dei Paschi now has a weak hand. Shareholders can always hold out for a higher price, but Intesa’s Messina has little reason to raise his offer much further, not least since he appears to have the backing of at least two of Monte dei Paschi's largest shareholders. It's no surprise then that the smaller bank's shares now trade roughly in line with the value of Intesa’s offer.
The saga illustrates a cold M&A reality. It’s hard to persuade shareholders to back an uncertain, hurried counter-manoeuvre, even if it has a sound strategic logic. That's especially the case when the alternative carries a premium. In Italy, where insiders have substantial influence, defensive tricks can be complex. Other European targets have fended off deals: think Banco de Sabadell SABE.MC with BBVA BBVA.MC, or Banco BPM with UniCredit CRDI.MI. Yet in both cases the target benefitted from government help, which Lovaglio seemingly lacked. With defensive M&A, simply asking investors to take the strategic long-term view is rarely enough.
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CONTEXT NEWS
Shareholders in Banca Monte dei Paschi di Siena on October 29 voted against CEO Luigi Lovaglio’s plan to launch offers on Banco BPM and Banca Generali.
Some 91% of votes at the meeting, which had a turnout of 66% of the capital, voted against the proposed offers.

(Editing by Liam Proud; Production by Oliver Taslic)
((For previous columns by the author, Reuters customers can click on UNMACK/neil.unmack@thomsonreuters.com))