Monte dei Paschi Faces Resistance to M&A Bids and Shareholder Defections

Banca Monte dei Paschi di Siena faces mounting resistance as core investor FGC plans to vote against its multibillion-euro acquisition bids for Banco BPM and Banca Generali. Meanwhile, Banco BPM’s top stakeholder, Crédit Agricole, has refused to tender its shares, strengthening Intesa Sanpaolo’s competing takeover pursuit.

Banca Monte dei Paschi di Siena (MPS) is confronting severe roadblocks in its acquisition strategy, which was launched in an effort to fend off an unwelcome takeover bid by Intesa Sanpaolo. Francesco Gaetano Caltagirone’s holding company, FGC, announced it will vote against MPS’s proposed deals at the upcoming shareholder meeting on 29 October, according to Reuters reporting cited by Yahoo Finance. FGC holds a 10.26% stake in the Tuscan lender and intends to oppose the planned purchases of Banco BPM and Banca Generali, alongside a proposed combination with Mediobanca.

In August, MPS confirmed plans to acquire Banco BPM and Banca Generali through two separate share-based offers carrying a combined valuation of €34bn ($40bn). Under the terms of the proposals, the bid for Banco BPM values that lender at €25.3bn, while the offer for Banca Generali stands at €8.7bn. However, those defensive moves now hang in the balance as key stakeholders push back against chief executive Luigi Lovaglio’s strategy for independence.

Crédit Agricole Rejects Banco BPM Bid

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MPS suffered a separate setback on its Banco BPM approach when Crédit Agricole ruled out participating in the share swap. Speaking at a press conference in Frankfurt, Crédit Agricole chief executive Olivier Gavalda stated that the French bank would not tender its 29.3% stake in Banco BPM into the MPS offer. Bloomberg cited Gavalda describing the proposal as not attractive enough.

We decided not to offer its shares into the bid.

Olivier Gavalda, Chief Executive, Crédit Agricole

Crédit Agricole serves as Banco BPM’s largest shareholder. The French lender has previously indicated a preference for combining Banco BPM with its own Italian operations and has evaluated alternative options, including a potential acquisition of Banco BPM itself, according to Bloomberg sources. Back in August, Banco BPM had already halted its pursuit of a combination with MPS after opposition from Crédit Agricole undermined those efforts.

Intesa Sanpaolo’s Pursuit and Shareholder Split

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The resistance from major investors directly benefits Intesa Sanpaolo in its ongoing pursuit of Monte dei Paschi. Intesa has indicated it will withdraw its own offer if shareholders approve the independence defense plan championed by MPS chief executive Luigi Lovaglio. While Caltagirone has not formally committed his shares to Intesa, FGC’s formal opposition undermines Lovaglio’s push to keep the bank independent.

Other prominent stakeholders have already aligned with Intesa. Delfin, the Del Vecchio family investment company, and Edizione, the vehicle backed by the Benetton family, have thrown their support behind Intesa’s improved offer. Together, Delfin and Edizione account for nearly one-third of Monte dei Paschi’s share capital.

With major blocks of shares lining up against the bank’s acquisition strategy, securing the two-thirds majority required to approve Lovaglio’s proposals at the 29 October meeting appears increasingly difficult.