Banca MPS is proceeding with caution; the board is considering the offers on the table

(Il Sole 24 Ore Radiocor) - Banca Mps is under the spotlight in the wake of the bank’s board meeting, which examined the merger proposals on the table: namely, the public takeover bid launched by Intesa Sanpaolo and the merger proposal from Banco Bpm, the details of which are yet to be finalised. Shares in the Siena-based bank are trading cautiously.

On the eve of the vote, the Rocca Salimbeni board set out its views on Intesa’s offer, highlighting certain reservations both in terms of valuation – considering the proposed price of around 30 billion euros to be rather low, – and regarding the business rationale behind the transaction. The board, however, reaffirmed the soundness of the 2026–2030 strategic plan drawn up for MPS as a stand-alone entity, the business rationale behind the integration of Rocca Salimbeni and Mediobanca, and the bank’s strong capital position. Finally, as Chief Executive Luigi Lovaglio had also indicated in recent days, the board of directors also decided to evaluate all possible options and therefore to conduct a more in-depth analysis of the proposed merger with Banco BPM, considering it necessary to gain a full understanding of the transaction’s industrial merits, its financial sustainability and its ability to create value for all stakeholders.

Analysts at Equita, noting that the firm is acting as an adviser to Intesa in the public takeover bid launched for the Tuscan bank, believe that Intesa’s offer ‘remains highly attractive’, incorporating a premium of 12.5 per cent over the reference price of 5 June. Furthermore, unlike recent M&A deals in the Italian banking sector, ‘the proposal includes a cash component from the outset, amounting to one euro for every MPS share tendered’. Nor should it be forgotten that Intesa boasts a solid track record in integrating acquired entities, from the Veneto banks to UBI, and a proven ability to realise the announced synergies. ‘The structure of the transaction would also allow current MPS shareholders to hold approximately 23 per cent of the combined entity, enabling them to participate directly in the value creation resulting from the integration and to benefit from the generation of future synergies, a significant portion of which – particularly in terms of costs – is attributable to Intesa’s scope of operations”, the SIM analysts further highlighted, adding that “from a valuation perspective, MPS shareholders would also have access to a stock with attractive valuations, given that Intesa is trading at a price-to-expected-earnings ratio for 2028 of 9.3 times, compared with a sector average of 10.3 times and MPS’s 12 times”. Intesa, they continued, also boasts an extremely solid capital base and high-quality assets, with high profitability – exceeding that of MPS – and a strong commitment to a generous and sustainable shareholder remuneration policy. Over the past five years, the bank has in fact distributed over €30 billion through share buybacks and dividends. Equita recommends a ‘Buy’ on MPS, with a target price of €11.8, and also a ‘Buy’ on Intesa Sanpaolo, with a target price of €7.4.