MPS’ double Hail Mary is saner than it seems

Intesa Sanpaolo

21/08/2026 09:59

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. Refiles to fix typo in advisory.
By Neil Unmack
LONDON, Aug 21 (Reuters Breakingviews) - The next textbook on M&A tactics should be written by Italian bankers. In the same year that UniCredit CRDI.MI CEO Andrea Orcel pulled off a politically testy coup on Germany's Commerzbank CBKG.DE, and Intesa Sanpaolo’s ISP.MI Carlo Messina pounced on Banca Monte dei Paschi di Siena BMPS.MI, the latter’s CEO Luigi Lovaglio has come up with something totally new. Call it the simultaneous double takeover defence. It looks desperate and complex, but also has a strategic and political logic.
Lovaglio probably doesn’t get much sleep. Last year he clinched a hostile takeover of Mediobanca MDBI.MI and overturned his attempted ousting by a major Monte dei Paschi shareholder.
His current mission is to fend off Italian behemoth Intesa, which in June offered €30.6 billion in cash and stock for the world's oldest bank. Lovaglio's defensive manoeuvre, unveiled on Friday, is to try to acquire smaller rival Banco BPM BAMI.MI and also Banca Generali BGN.MI, a wealth manager. Before that he will pay his shareholders a €4 billion in special dividends.
Challenge number one will be persuading his M&A targets. The key shareholder for Banca Generali is insurer Assicurazioni Generali GASI.MI, in which Monte dei Paschi effectively has a 13% stake. Lovaglio is offering a slim 10% premium. But Generali CEO Philippe Donnet has a reason to play ball. He may be nervous about Intesa, an insurance rival, controlling Monte dei Paschi, because this would also give the banking behemoth significant sway over Generali too.
Winning Banco BPM over looks harder. Lovaglio isn't offering a premium, so roughly 30% French shareholder Crédit Agricole may play hardball. Still, Lovaglio only needs 50% of BPM's shares for that deal to go through. Other investors may be enticed by the synergies.
Then there are Monte dei Paschi's shareholders. Lovaglio needs two-thirds support from his own investors. They include powerful groups like Delfin and Francesco Gaetano Caltagirone. The latter, who owns 10% of Monte dei Paschi, has tussled with the CEO.
At least Lovaglio has a financial case to make. Monte dei Paschi investors will get a €4 billion special dividend and 50.1% of the mash-up that Lovaglio hopes to create. His bank, Banco BPM and Banca Generali were collectively worth €55 billion before the M&A hurricane drove up values, or €51 billion less the special dividend. The union will generate cost savings with a net present value of perhaps €7 billion, according to Breakingviews calculations. On those numbers, the total value to Monte dei Paschi shareholders would be €33 billion.
That compares favourably with the bank's undisturbed €27 billion value. It's also in the same ballpark as the Intesa bid which, using undisturbed prices for comparability and factoring in Monte dei Paschi’s share of the synergies, is worth some €32 billion, per Breakingviews calculations. Aside from the financials, domestic Italian shareholders may also be inclined to support a transaction that fulfills the government’s ambition to create a third force in Italian banking.
One danger is that Intesa's Messina raises his offer. Lovaglio’s complex deal also involves some integration risk, since he has only just swallowed Mediobanca. The 71-year-old will have to keep four sets of employees happy. But as M&A manoeuvres go, you can't fault Lovaglio's ambition.
     
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CONTEXT NEWS
Banca Monte dei Paschi di Siena on August 21 launched simultaneous all-share takeover bids worth about €34 billion for rival Banco BPM and wealth manager Banca Generali.
The move is part of CEO Luigi Lovaglio's attempt to fend off a hostile takeover approach launched by Italy's largest lender Intesa Sanpaolo, worth €30.6 billion when launched in June.
Shares in Monte dei Paschi were up 0.8% as of 0754 GMT on August 21, while Banco BPM and Banca Generali were down 0.5% and 2.8% respectively.

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