**Monte Paschi CEO Aims for Mediobanca Control Amid Tensions**
Banca Monte dei Paschi di Siena SpA’s CEO, Luigi Lovaglio, has expressed intentions to replace his counterpart at Mediobanca SA if he successfully gains control of the larger rival. In a recent interview with Bloomberg TV, Lovaglio revealed that he attempted to reach out to Mediobanca’s CEO, Alberto Nagel, but received no response. He noted that Nagel appears “not interested in the deal,” prompting Lovaglio to suggest the need for a new CEO at Mediobanca.
This exchange highlights the ongoing tension between the two banks as the offer period progresses. Monte Paschi’s announcement in January to pursue Mediobanca took many by surprise, especially considering the lender’s ongoing transition back to full private ownership. Nagel has rejected the bid and has proposed a takeover of Banca Generali SpA, which is viewed as a defensive strategy.
Lovaglio believes that merging with Mediobanca would enhance Monte Paschi’s capabilities in asset gathering, private banking, investment banking, and insurance, while both banks would retain their brands post-merger. He emphasized the strong industrial and financial rationale behind the proposal, stating, “We are rewarding our shareholders for the next 10 years, with 100% payout, and moreover, thanks to fiscal benefits, we will increase the capital by €500 million each year.”
Lovaglio is optimistic that Mediobanca investors will tender more than 66% of the share capital during the offer period, which began on July 14. However, he indicated that he could achieve “de facto” control with as little as 35%. Monte Paschi’s offer includes 25.33 new shares for every 10 in Mediobanca, valuing the target at approximately €14.6 billion ($17 billion), which is below Mediobanca’s market capitalization of around €15.1 billion. The initial offer included a premium of about 5%, suggesting that investors anticipate a potential increase in the bid.
This proposed transaction is part of a series of overlapping mergers and acquisitions that could significantly alter the financial landscape in Italy, the third-largest economy in the European Union. The Italian government, which still holds a stake in Monte Paschi, supports the plan to create a substantial banking group centered around the Tuscan lender. Additionally, the billionaire Del Vecchio family and construction magnate Francesco Gaetano Caltagirone, who are major investors in Mediobanca, also back Monte Paschi’s initiative. Lovaglio noted their consistent support throughout the process.
In response, Mediobanca has raised concerns about the potential conflict of interest due to the financial involvement of these investors in multiple companies, which may misalign their interests with those of other shareholders.
As Monte Paschi, recognized as the world’s oldest bank still in operation, navigates this complex landscape, the outcome of these negotiations will be closely watched by industry stakeholders.
**FAQ**
*What is the current status of the merger between Monte Paschi and Mediobanca?*
The merger proposal is currently under consideration, with Monte Paschi aiming to gain control of Mediobanca amid ongoing tensions and negotiations.
