Siena, Italy – Monte Dei Paschi di Siena sticks to his plans to acquire Mediobanca For 13 billion euros ($ 14.3 billion) despite the current market turbulence, the CNBC will tell that it will complete the deal in July.
The oldest bank in the world is still in operation, surprised investors in January by making an All-Share offer for Mediobanca, a prestigious institution aimed at asset management and investment banking. Mediobanca has rejected the proposal and denounced it as a “destructive” movement that is deprived of financial reasons.
Monte Dei Paschi has taken on various challenges over the years, in particular when it was saved by the Italian government in 2017, after it was not collected near private investors. The Italian government has sold its majority interest in Monte Dei Paschi and currently represents less than 12% of ownership.
The CEO of the Bank Luigi Lovaglio told CNBC on Monday that Monte Dei Paschi is “back” and “in control over our destination”.
When asked whether the current market turbulence could be a problem for the expansion plans, Lovaglio said“”The [market] The situation has no influence on our deal. “
“On the opposite, [the market situation] confirms that the size matters, [it] confirms that you have to diversify in income, “he said, adding that if they were already a combined entity, they would” be stronger “and” have the ability to respond much faster. “
The recent market volatility has led to some companies on hold. British private equity company 3i Group PLC has Reportedly A sale of the maker of MPM of pets, while fintech company Klarna has put his IPO plans on hold.
Analysts are divided over the benefits of the deal between Monte Dei Paschi and Mediobanca. Deutsche Bank said, for example, in mid -March that the market ignored some potential possibilities for Monte Dei Paschi, including a larger distribution policy.
Other analysts warned of limited synergies in combining two different banks. For example, Barclays said on Monday that it reduced his price target for Monte Dei Paschi and got a skeptical picture of the potential profit of a deal with Mediobanca. “If Monte Dei Paschi decides to spend more to convince the majority of the institutional shareholders of Mediobanca, the surplus capital could reduce,” Barclays said.
Speaking with CNBC, Lovaglio was the offer for Mediobanca a “fair price” and did not comment on whether the company would sweeten the deal to make it more attractive for Mediobanca shareholders.
“Hopefully we can complete the deal in July,” he added.
In the midst of a pullback on the global stock markets on Monday, Monte Dei Paschi and Mediobanca both closed about 5% lower. Since Monte Dei Paschi announced his intention to buy Mediobanca on January 24, the shares of the latter have lost about 14% of their value and the first about 8.5%.
Greater ambitions
The range of Monte Dei Paschi for Mediobanca came at a time of broader consolidation efforts in Italian banking. Unicredit announced an offer last year to buy rival Banco BPM For around 10 billion euros.
Lovaglio said these bids represent the first wave of domestic consolidation for Italian banks.
“I believe this is the first phase [of consolidation] And we will probably have a second phase in two years. Therefore, by combining Monte [dei] Paschi with Mediobanca, we will be able to be a protagonist again, “said Lovaglio.