MPS responds to Consob: our ‘discounted’ offers, if calculated prior to Intesa’s OPAS

What about Monte dei Paschi’s bids for Banco BPM and Banca Generali? They would be ‘at a discount’, rather than at a premium, compared with stock market values if measured prior to Intesa Sanpaolo’s public takeover bid for MPS, which incorporated a 12.5 per cent premium, thereby driving up the price of the Siena-based bank’s shares. This is what emerges from the supplementary information published by MPS at the request of Consob, which allows the value of the two public offers to be adjusted, at least in part, to account for the effect of Intesa’s offer. At the same time, however, MPS reiterates that the transactions would go ahead even in a scenario where Intesa were to take control of the bank, and sets out the business rationale and expected synergies from the two mergers.

At Consob’s request, the bank is using the share prices of 5 June as a reference – the last day before the announcement of Intesa’s public takeover bid. Compared with those figures, the bank clarifies, the MPS bid for Banco BPM would have represented a discount of 8.1 per cent on the Piazza Meda price, whilst the bid for Banca Generali would have been 3.2 per cent below market prices. The picture remains unchanged when the time horizon is extended. Based on MPS’s weighted average share prices one, three, six and twelve months prior to 5 June, the discount on Banco BPM ranges from 5.7 per cent to 10.4 per cent, and that on Banca Generali from 1.6 per cent to 7.9 per cent. In effect, the Siena-based bank essentially points out that, net of the revaluation of MPS shares triggered by Intesa’s offer, the exchange ratios offered do not reflect a premium over the market prices of Banco BPM and Banca Generali.

‘The operations will continue even if Intesa goes ahead with the takeover bid’

MPS also addresses a sensitive aspect of the complex situation in which the three bids on the market effectively overlap. It states that the public offers for Banco BPM and Banca Generali are irrevocable and are not contingent upon the failure of Intesa’s public takeover bid. “The completion of Intesa Sanpaolo’s offer and any consequent change in control of MPS would not, in themselves, result in the lapse, invalidity or revocation of the offers made by MPS,” the bank states in its press release. The conditions for the offers to take effect and the related rights of withdrawal would remain unchanged.

Finally, the bank led by Luigi Lovaglio addressed the issue of its business strategy and synergies. Regarding the bank, it emphasises continuity with the merger plan discussed prior to Intesa’s bid, involving the creation of a group with assets of 448 billion, loans of 243 billion, direct deposits of 299 billion and total assets of 693 billion. In the event of a merger, no branch closures are planned, says MPS, subject to the Antitrust Authority’s guidance.