BY COMFORT OGBONNA
Italy’s largest bank, Intesa Sanpaolo, has moved closer to completing its proposed takeover of Monte dei Paschi di Siena after the target bank’s biggest shareholder agreed to support Intesa’s improved offer.
Delfin, the investment holding company controlled by the Del Vecchio family, has committed to tendering its 17.6% stake in Monte dei Paschi under Intesa’s revised offer, which values the transaction at about €35 billion ($39 billion), Intesa said Sunday.
The agreement represents a significant development in Intesa’s attempt to absorb Monte dei Paschi and further reshape Italy’s banking sector after two years of consolidation and competition among major financial institutions.
The takeover effort has faced resistance from Monte dei Paschi Chief Executive Luigi Lovaglio, who unveiled a defensive strategy in August designed to give shareholders an alternative to accepting Intesa’s offer.
Intesa responded by improving the terms of its proposal. The bank said Saturday it would offer Monte dei Paschi shareholders an additional €800 million in cash if they rejected Lovaglio’s proposed defense plan.
The additional payment increases the cash component of Intesa’s offer by 25%, from €3 billion to €3.8 billion. Based on the closing price of Monte dei Paschi shares on Friday, the revised proposal represents an overall improvement of about 2.3%.
The move puts greater pressure on Monte dei Paschi shareholders as they prepare to decide whether to approve the defensive strategy at a meeting scheduled for Oct. 29.
Under Italian takeover rules, shareholders must authorize measures that could prevent or complicate a takeover bid. Lovaglio has urged investors to support his plan, arguing that maintaining an alternative to Intesa’s proposal could strengthen Monte dei Paschi’s negotiating position and potentially lead to better terms.
Lovaglio has also said shareholders could approve the defensive plan even if they ultimately intend to sell their shares to Intesa.
Intesa, however, has made its position clear. The bank said late Saturday that it would withdraw its takeover offer if Monte dei Paschi shareholders approve Lovaglio’s defense strategy at the Oct. 29 meeting.
The decision creates a direct choice for shareholders: accept the improved Intesa proposal or approve a strategy that could result in the takeover offer being withdrawn.
Delfin’s decision to support Intesa adds considerable weight to the bank’s position. The holding company, which represents the interests of the Del Vecchio family, controls 17.6% of Monte dei Paschi and is therefore one of the most influential shareholders in determining the outcome.
Delfin also controls a major global eyewear business, giving the family’s investment vehicle significant influence in European corporate affairs.
Its commitment to tender its Monte dei Paschi shares means Intesa has secured support from a substantial shareholder ahead of the critical vote. Delfin has also committed to rejecting Lovaglio’s defensive plan at the Oct. 29 meeting.
The development increases pressure on other Monte dei Paschi shareholders to determine whether they are better served by accepting Intesa’s revised offer or backing management’s alternative strategy.
The dispute comes after a period of rapid consolidation in Italy’s banking industry, with financial institutions seeking greater scale, stronger market positions and improved efficiency.
For Intesa, acquiring Monte dei Paschi would further strengthen its position in the Italian banking market. For Monte dei Paschi, the decision represents a major strategic turning point after years of restructuring and efforts to strengthen its financial position.
The outcome will depend heavily on shareholder decisions later this month. With Intesa threatening to withdraw its offer if the defensive plan is approved and Delfin already committed to supporting the takeover, the Oct. 29 meeting is shaping up to be a crucial moment for the future ownership and strategy of Monte dei Paschi.
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