Italy to back best offer in M&A moves for Monte Paschi, economy minister says (updated)

Mediobanca Banca Di Credito Finanziario SpA

Wed 15:44

Adds details and background throughout
By Giuseppe Fonte

    ROME, June 10 (Reuters) - Italy needs to cut its residual stake in bailed-out bank Monte dei Paschi di Siena (MPS) BMPS.MI and will back whichever constitutes the best merger deal between the rival proposals on the table, Economy Minister Giancarlo Giorgetti said.
Italy's top banking group Intesa Sanpaolo ISP.MI on Monday made a €30.6 billion ($35 billion) unsolicited cash-and-share bid to buy MPS. Smaller lender Banco BPM BAMI.MI expressed interest in a merger deal with MPS, a day before Intesa's offer, but has not made a formal bid.
"We have to get out of (Monte dei Paschi) and figure out who offers us the most, that's how it works," Giorgetti told reporters on Wednesday on the sidelines of a parliamentary hearing.
The Treasury still owns a 5% stake in MPS after returning the bank to private hands, following a costly bailout in 2017 agreed with European Union Authorities.
By stating that the government will back the offer that fully captures the bank's value, Giorgetti confirmed that Rome was taking a neutral stance on MPS's future, confirming a previous Reuters report.
MPS, through its recently-acquired unit Mediobanca, has become the largest investor in insurer Generali GASI.MI, which the government sees as strategic given its role in managing hundreds of billions of euros in Italians' savings.
Intesa's Chief Executive Carlo Messina has offered Rome guarantees that management of these savings will remain in domestic hands if Intesa's bid for MPS goes through, a government official told Reuters, without providing details.

    By adhering to Intesa's offer, Rome would retain a 1% stake in the post-merger banking group.
  
Matteo Salvini's co-ruling League Party, of which Giorgetti is a leading member, has in the past expressed ​support for a ​BPM-MPS tie-up, but Giorgetti's comments suggest the League has pulled back from this position.
Italy has so-called "golden powers" allowing it to rein in bank takeover deals, but people familiar with the matter told Reuters this week it would not use ​the legislation to derail Intesa's plans.

    The European Commission is pushing to establish the principle that Italy cannot set conditions on deals falling under the scope of the ​ECB and the Commission within their respective areas of competence.

    "We are bound by public debt rules," Giorgetti said, referring to the need for the Treasury to maximise taxpayers' interests in managing state assets.
  

 (Reporting by Giuseppe Fonte, editing by Gavin Jones)
 ((giuseppe.fonte@thomsonreuters.com; +390680307711;))