Monte dei Paschi investors reject CEO’s defense against Intesa takeover

What happened

Monte dei Paschi di Siena (MPS) investors overwhelmingly turned down the defensive acquisitions their chief executive had proposed, the Financial Times (FT) reported. Italian business daily Il Sole 24 Ore said about 65.9% of the bank's capital was represented at the meeting in Siena. Roughly 91% of those votes went against the all-share offers for Banco BPM and Banca Generali, which together were worth around €34 billion. Earlier in the day, investors also blocked a full merger of Mediobanca into MPS, with 63.65% against and 32.91% in favor, ANSA reported. Reuters said holders of around 60% of MPS capital opposed the plan, clearing the path for Intesa Sanpaolo's bid.

What it means

This was a vote everyone saw coming. Italy's Del Vecchio and Caltagirone families, who between them own about 30% of MPS, had sided with Intesa, according to Reuters. Delfin, the Del Vecchio holding company, had agreed to tender its shares. Because Lovaglio needed two-thirds of the votes cast to push ahead, that bloc alone made his plan very hard to pass. Il Sole 24 Ore listed Norges Bank and the Benetton family's Edizione among other holders opposed to the plan.

Money played a big part. In early October Intesa raised the cash in its offer from €1 to €1.25 per MPS share, on top of 1.6 new Intesa shares for each MPS share, Reuters reported. That extra €800 million was payable only if MPS investors rejected the counter plan. Intesa had also said it would walk away if either of the twin bids was approved. In other words, voting yes risked losing the offer altogether, while voting no unlocked more cash.

Sources put different values on the deal. The FT described a €35 billion bid, while Reuters and ANSA cited about €33 billion. Values for share-based offers move with the bidder's stock price, so the headline number can shift from day to day.

The vote does not end the process. Reuters said the European Central Bank approved Intesa's offer this week, but an antitrust decision is still due next month. To ease competition concerns, Intesa plans to sell about half of MPS's roughly 1,200 branches, along with the Siena head offices, to insurer Unipol, which would combine them with its bank BPER under the Monte dei Paschi name. Lovaglio told the meeting that the final terms depend on the antitrust ruling and on how many investors accept. "The match is not over," he said.

For Italy, the result marks a turn. The state rescued MPS in 2017 and sold down its stake in 2023 and 2024, hoping to build a third large banking group around it to compete with Intesa and UniCredit, Reuters noted. A takeover by Intesa, the country's largest bank, would end the independence of a lender founded in 1472.

The bull case

For MPS investors, the vote unlocks the richer offer, with €1.25 in cash plus Intesa shares for each MPS share. It also removes the uncertainty of two large all-share deals that would have issued many new MPS shares. For Intesa, the path to a big domestic deal is clearer, the ECB has already given its approval, and the branch sale to Unipol is designed to answer competition worries in advance.

The bear case

The deal is not done. A critical antitrust verdict is still pending and could change the terms, as Lovaglio pointed out. Because most of the payment is in Intesa shares, the value MPS investors receive depends on Intesa's stock price. Splitting up MPS between Intesa and Unipol also drew sharp criticism from local shareholders and unions in Siena, which could add political noise ahead of Italy's elections next year.