Mediobanca rallies and purchases also on Mps, analysts positive on merger plan
(Il Sole 24 Ore Radiocor) - Mediobanca rallied and Mps was rewarded after the go-ahead for the plan to merge the two institutions and delist Piazzetta Cuccia, announced on Tuesday. The announcement was expected in terms of content but surprised by its timing, given that the market was expecting news from next week's board of directors. Mediobanca shares did not price in at the opening and then jumped around 8%, while Mps also advanced with a good advance of close to 3 points. The board of Mps approved the plan that envisages the merger by incorporation of Mediobanca with subsequent delisting, the timing of which, however, has not been announced. Piazzetta Cuccia will continue to operate under the same name as a separate company, maintaining its focus on private banking and investment banking, and will retain direct control of 13.2% of Generali. More details on the exchange ratio and synergies as well as updated targets for the Mps group will be presented on 27 February. The initial offer proposed by Mps was a ratio of 2.3 times, while post-dividend 2.533 times, Intermonte's analysts point out.
Meanwhile, chairman Maione is working to draw up the list of candidates for the new board of directors with an initial list of 30 names and a shortlist of 20 names by the end of the month. For Intermonte, 'the delisting of Mediobanca was expected and is in line with expectations. The operation increases visibility on the announced synergies of EUR 700 mln, with the full use of tax benefits'. Intermonte has a buy rating on Mps with a target price of €11. "Based on current market prices, we estimate that the merger will have a positive impact on Mps' Cet1 of 50-60 basis points (from an estimated 15.5% in 2026 to 16.1%), with negligible earnings per share dilution," says Deutsche Bank, which believes that full control of Mediobanca should generate "significant benefits, including greater visibility on the €700m synergies".
In addition, according to analysts, "the transaction willsimplify the group structure, strengthen strategic agility and create a closer link between Private Banking/Investment Banking performance and overall profitability". Also according to Equita (which has a hold rating on Mps and Mediobanca, with a target price of 10.50 and 19.80 respectively), the transaction "will mitigate the integration risk and strengthen the capital structure, with a Cet1 higher than 16.5%". Moreover, the industrial plan of 27 February 'will be important to have more detail and visibility on the integration process, synergies and remuneration levels in the coming years'. With Mediobanca 100% integrated, according to Equita, Mps should approach an adj net profit of EUR 3bn by 2028.
