Banco BPM’s board said on Aug. 25 that Monte dei Paschi di Siena’s proposed exchange offer was unsolicited, had not been agreed in advance and offered no premium to its shareholders. The response complicates one leg of MPS’s roughly €34 billion twin-bid launch, announced four days earlier, targeting Banco BPM and Banca Generali through simultaneous all-share voluntary exchange offers.
Banco BPM calls MPS offer unsolicited and without a premium
The Banco BPM board’s assessment, reported by Borsa Italiana’s Teleborsa service, directly challenges the terms proposed by MPS for the bank’s shareholders.
MPS launched the Banco BPM offer alongside a separate bid for Banca Generali on Aug. 21. The Siena-based bank put the value of the Banco BPM proposal at approximately €25.31 billion, making it the much larger component of the combined transaction package.
Banco BPM’s statement did not describe a mutually negotiated transaction. Its emphasis on the absence of a premium contrasts with the pricing presentation attached to MPS’s proposed Banca Generali exchange.
Different exchange terms for Banco BPM and Banca Generali
The Banco BPM proposal would give shareholders 1.567 newly issued MPS shares for each Banco BPM share. For Banca Generali, MPS offered 6.958 newly issued shares for every Banca Generali share, according to Borsa Italiana’s Radiocor.
That Banca Generali ratio represented an indicated 10% premium based on Aug. 19 prices. MPS valued the Banca Generali offer at about €8.72 billion, bringing the two all-share offers to roughly €34 billion combined.
MPS confirmed the simultaneous voluntary exchange offers in its Aug. 21 announcement, published on the bank’s website. The structure means shareholders in each target are being offered newly issued MPS stock rather than cash consideration.
€4 billion distribution accompanies the twin bids
Alongside the offers, MPS proposed an extraordinary €4 billion distribution to its own shareholders. The package comprises €1 billion in cash and €3 billion in Assicurazioni Generali shares.
The proposed distribution is separate from the share-exchange terms offered to Banco BPM and Banca Generali investors, but was announced as part of the same transaction package. Banco BPM’s board has now made clear that it does not view its exchange proposal as carrying a premium for its shareholders.
