The proposal to acquire Mediobanca SpA was approved by Banca Monte dei Paschi di Siena shareholders at an extraordinary general meeting on Thursday, bringing the Italian bank closer to its ambitious goal of acquiring one of its main competitors.
In the extraordinary general meeting, around 87% of shareholders who participated voted in favor of the proposal submitted by CEO Luigi Lovallo to issue new Monte Paschi shares to finance the deal. This is a percentage that far exceeded the required two-thirds majority.
The decision by Monte Paschi shareholders now shifts the pressure to Mediobanca shareholders, whose management has described the deal as “disastrous.” But for Lovallo, the approval of his side represents a historic turning point for the Siena-based bank, which has been plagued by scandals and poor performance for more than a decade.
We recall that Lovallo had submitted a surprise takeover offer for the bank earlier this year through a share swap, valuing Mediobanca at around 13.4 billion euros. He has stressed that the merger will strengthen the new group that will be created on multiple levels, however, Mediobanca CEO Alberto Nagel rejected the deal.
Monte Paschi insists on its intention, stressing that its offer is sufficient and has set a target of acceptance of its proposal by at least 67% of Mediobanca shareholders.
At the same time, however, it has left open the possibility of proceeding with the agreement even with 51% of shareholders, pointing out that the strategic objectives of the merger can be achieved in this scenario as well.
It is worth noting that Monte Paschi can already count on the support of shareholders who control almost 30% of Mediobanca’s share capital, given the percentages held by the Caltazirone and Del Vecchio families.
Francesco Gaetano Caltagirone, Del Vecchio family’s Delfin and of course the Italian state itself are among the Monte Paschi shareholders backing the deal and are also playing a central role in the wave of mergers and acquisitions sweeping Italy’s banking landscape.
If Monte Paschi’s bid is successful, a new national banking giant will be created, while at the same time the Italian government will gain enhanced influence over the financial system.
Monte Paschi, considered the oldest bank in operation in the world, has only recently emerged from a long period of restructuring. The acquisition of Banca Antonveneta shortly before the global financial crisis of 2008-2009 was a catalyst in the deterioration of its position, ultimately leading to its nationalization in 2017. Since then, the bank has recorded a rapid improvement in its results, with a corresponding increase in its share price, which allowed the Italian government to plan its full privatization.
