By Elvira Pollina and Gianluca Semeraro
MILAN (Reuters) -Italian merchant bank Mediobanca on Thursday renewed its opposition to Banca Monte dei Paschi’s takeover offer, even after it was sweetened with a cash component, saying that it remained “entirely inadequate”.
Mediobanca restated its position after a board meeting in Milan on Thursday, issuing a statement that confirmed what sources had earlier told Reuters.
Italian state-backed MPS has secured 38.5% of Mediobanca, stock exchange data showed on Wednesday, exceeding the minimum ownership threshold targeted under its hostile bid.
MPS hit its minimum take-up goal after adding a 750 million euro ($878 million) cash sweetener on Tuesday, lifting the value of its offer above 16 billion euros. The bid ends on September 8, and will reopen for a further week on September 16.
Italian billionaire Francesco Gaetano Caltagirone and Delfin, the holding company of the late Luxottica founder Leonardo Del Vecchio’s heirs, who together control nearly 30% of Mediobanca and are also investors in MPS, support the offer.
The two investors, long at odds with Mediobanca CEO Alberto Nagel, accuse him of underdelivering on growth and overreliance on an investment in insurer Generali to prop up earnings.
Mediobanca’s board approved the statement by a majority vote, with director Sandro Panizza voting against and vice-chair Sabrina Pucci abstaining.
GOVERNMENT BLESSING
MPS’ proposed acquisition has the support of the Italian government, which aims to create a stronger rival to Intesa Sanpaolo and UniCredit as a series of deals redraws the banking map in Italy.
The bold takeover move marks a remarkable turnaround for MPS, regarded as the world’s oldest lender, which required a state bailout in 2017.
The bank needs 50% of Mediobanca’s capital plus one share to unlock tax benefits it has been counting on to reward its shareholders.
Were MPS to secure more than half of Mediobanca’s capital, CEO Nagel and the board are likely to step down, two people close to the matter said.
With a stake of less than 50%, it would be more difficult to put forward changes to the board, they said.
A two-thirds ownership would grant it control of extraordinary shareholder decisions and accelerate its ambitious plan to combine its commercial banking operations with Mediobanca’s investment banking and wealth management businesses.
($1 = 0.8542 euros)
(Reporting by Elvira Pollina and Gianluca Semeraro; Editing by Keith Weir and Jan Harvey)
