Mediobanca launches 6.3 billion euro takeover bid on Banca Generali

For Mediobanca, the transaction would result in an increase in Rote (return on tangible capital) from 14% to 20%.

Consolidated net profit would rise by 15% to EUR 1.5 billion, with an increase in 'mid-single digit' earnings per share.

Synergies are estimated at EUR 300m, 50% from costs, 28% from revenues, 22% from funding. The Cet1 regulatory parameter would stand at 14%.

The transaction, explained Mediobanca CEO Alberto Nagel, aims to merge Banca Generali. Any Generali shares in the portfolio at the end of the offer, Nagel specified in response to questions, would be used to support the purchase of other shares of Banca Generali still in the process of being merged. Clearly, the offer could not succeed without the consent of Generali, which holds 50.17% of Banca Generali's capital.

A defensive action to evade the Mps takeover bid, branded as hostile by Piazzetta Cuccia's board of directors? In reality, it is an operation that Mediobanca has been studying for five years. At the time, nothing was done about it, although even then it was hypothesised to finance the acquisition at least in part with the Generali shares in the portfolio. Nagel explained that as of today he would be discussing with Generali and Banca Generali the project, which would expand Mediobanca's wealth management reach and at the same time could expand the range of insurance and asset management products offered to Mediobanca's clients. Mediobanca would double in size in the area of wealth management, achieving a return similar to that offered by the stake in Generali, to which synergies would be added, releasable within three years. Fifty per cent of the new entity's revenues and profits would come from wealth management, 30 per cent from consumer credit, and 20 per cent from corporate and investment banking, a mix common in Europe only to two other entities, Ubs and Julius Baer.

At the same time, the offer will be illustrated to all shareholders, who will be able to choose, the CEO emphasised, between three options: keeping Mediobanca as it is, approving the growth project with Banca Generali, or adhering to the Mps offer. The latter does not necessarily exclude the move on Banca Generali.

The offer is expected to be completed by October, with full integration within the next 12 months.

Banca Generali's board of directors, which met today in an extraordinary session, took note of Mediobanca's announcement regarding the tender offer for all the shares of B.Generali. "Without prejudice to the fact that the more detailed analysis of the terms and characteristics of the offer is in progress," a note said, Banca Generali will express its opinion on the offer with the timing and in the manner required by law. The bank specifies that the offer "has not been solicited nor previously agreed with Banca Generali". Therefore, "the activities of the group will continue according to what has been planned or already communicated in order to continue to contribute to the creation of value for all shareholders and stakeholders".