SIENA, Italy – MONTE DEI PASCHI DI SIENA holds firm on his plans to acquire Mediobanca For 13 billion euros ($ 14.3 billion) despite the current market turbulence, telling CNBC that it will conclude the agreement in July.
The oldest bank in the world still active, surprised investors in January by making an all-round offer for Mediobanca, a prestigious institution focused on wealth management and the investment bank. Mediobanca rejected the proposal, denouncing it as a “destructive” decision without financial justification.
Monte Dei Paschi has been faced with several challenges over the years, especially when he was bailed out by the Italian government in 2017 after failing to collect liquidity that is well necessary for private investors. The Italian government has sold its majority participation in Monte Dei Paschi and it currently represents less than 12% of the property.
The CEO of the bank, Luigi Lovaglio, told CNBC on Monday that Monte Dei Paschi “was back” and “in control of our destiny”.
When asked if the turbulence of the current market could be a problem for its expansion plans, said Lovaglio: “THE [market] The situation will have no impact on our agreement. “”
“In the opposite, [the market situation] confirms this significant size, [it] Confirm that you must diversify on income, “he said, adding that if they were already a combined entity, they” would be stronger “and” have the capacity to react much faster “.
The recent market volatility has led certain companies to suspend certain transactions. British Investment Capital Company 3i Group PLC has would have Reported a sale of the MPM manufacturer of pet food, while the company Fintech Klarna has suspended its IPO plans.
Analysts were divided on the advantages of the agreement between Monte Dei Paschi and Mediobanca. Deutsche Bank, for example, said in mid-March, the market ignored certain potential opportunities for Monte Dei Paschi, including a larger distribution policy.
Other analysts have warned of limited synergies in the combination of two different banks. Barclays, for example, said on Monday that he reduced his course goal for Monte Dei Paschi, adopting a more skeptical vision on the potential gains of an agreement with Mediobanca. “If Monte Dei Paschi decides to spend more to convince the majority of medibanca institutional shareholders, the capital surplus could reduce,” said Barclays.
Addressing CNBC, Lovaglio was categorical, the offer for Mediobanca presents a “fair price” and did not comment if the company would soften the agreement to make it more attractive for the shareholders of Mediobanca.
“Hopefully that in July, we will be able to conclude the agreement,” he added.
In the midst of a decline in the world’s stock markets on Monday, Monte Dei Paschi and Mediobanca Parts both closed approximately 5% less. Since Monte Dei Paschi has announced her intention to buy MediBanca on January 24, the latter’s shares lost around 14% of their value and the first about 8.5%.
Larger ambitions
Monte Dei Paschi’s offer for MediBanca occurred at a time of broader consolidation efforts in the Italian bank. Unicredit announced last year a Rival purchase offer Banco BPM For around 10 billion euros.
Lovaglio said these offers represent the first wave of interior consolidation for Italian banks.
“I think it’s the first phase [of consolidation] And, probably, we will have a second phase in two years. This is why, by combining Monte [dei] Paschi with Mediobanca, we will be able to be a protagonist again, “said Lovaglio.
