Monte dei Paschi board to review M&A situation as Intesa raises bid pressure
Banca Monte dei Paschi di Siena is set to hold a board meeting late on Monday as pressure builds around Intesa Sanpaolo's takeover approach. The review comes after Intesa pledged to increase the cash component of its 35 billion euro offer and after several key MPS investors signaled opposition to the bank's defence plan.
Highlights
- Monte dei Paschi's board will review the evolving M&A situation after Intesa Sanpaolo raised by 25% the cash portion of its €35 billion bid.
- Intesa Sanpaolo's increased offer is contingent on MPS shareholders rejecting CEO Luigi Lovaglio’s defence plan ahead of the key vote.
- With shareholders controlling about 30% of MPS’s capital opposing the defence plan, reaching the required two-thirds approval on October 29 appears unattainable.
Board review follows bid and investor shifts
As reported by Reuters, the MPS board is due to examine the latest developments in the takeover situation after Intesa Sanpaolo moved to strengthen its offer, according to three people close to the matter who spoke on Sunday.Intesa said a week ago it would increase by 25% the cash component of its 35 billion euro takeover bid if MPS shareholders reject the defence plan proposed by Chief Executive Luigi Lovaglio.
One of the sources said the board will discuss the most recent changes in the situation, but it is not clear whether any additional defence measures could be presented to directors.
Defence plan faces difficult shareholder vote
Lovaglio has called a shareholder vote on the defence scheme for October 29, where he needs approval from two thirds of shareholders to move the plan forward.That threshold now appears out of reach after shareholders representing about 30% of the bank's capital said over the past week that they would not support the project, making it impossible to secure the required backing.
In our earlier coverage of the slowdown in corporate dealmaking, we explained how higher yields and tighter financing conditions have started to cool M&A activity and push back major IPO plans. We also noted that risk appetite has become more selective, widening the gap between strong headline market levels and softer real-world deal volumes.
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