The general shareholders' meeting of Banca Monte dei Paschi di Siena (MPS) held this Thursday in Siena ended with a vote against all points on the agenda, including a massive rejection, by 91% of those present, of the offers put forward by the world's oldest bank for the purchase of Banco BPM and Banca Generali. These operations were part of the strategy designed by chief executive Luigi Lovaglio as a shield against the public takeover bid (OPA) launched by Intesa Sanpaolo.
Lovaglio's growth plan thus suffered a serious setback in the face of strong opposition from the shareholding, which also voted against, with almost 64% of the votes, the proposed merger with Mediobanca, an entity over which MPS assumed control approximately a year ago.
"We were aware of the stance of some key shareholders and we knew that the arithmetic of the merger would be complicated," the MPS chief executive stated at the meeting, according to the Italian newspaper "Il Sole 24 Ore".
Represented at the meeting was 65.86% of the share capital, and both the dual offer on Banco BPM and Banca Generali and the integration with Mediobanca required the backing of two-thirds of the votes cast, a qualified majority that has clearly been beyond its reach.
"The proposed transactions are based on a clear idea: to build, around MPS, a broader and more competitive financial platform, better prepared to serve families, companies and local communities," Lovaglio explained in defending his acquisition offers before the voting began.
Despite the defeat at the meeting, Lovaglio tried to convey confidence, stressing that "the match is not over yet," and reiterated his rejection of Intesa Sanpaolo's OPA. "The result of this meeting should not be interpreted as the result of the offer and, on its own, does not determine the future of Monte dei Paschi. (...) everything will depend on the real terms of the public takeover bid, the decisions of the antitrust authorities and the level of participation," he asserted.
Shareholding distribution of MPS
During the meeting, chairman Cesare Bisoni detailed the current capital structure of MPS. Delfin appears as the main shareholder with around 17.53%, followed by the Caltagirone group, with 12.66%. The Italian state retains 4.86% and BlackRock holds 4.66%.
Likewise, Banco BPM maintains 3.74% of MPS's capital, while Barclays controls 3.77%, of which approximately 1% corresponds to direct participation and the remaining 2.77% is structured through financial instruments.
Escalation in the bidding war
On October 3, Intesa Sanpaolo announced an improvement in the economic terms of its takeover bid for MPS, raising the cash payment to 1.25 euros per share, compared with the euro proposed in June, and maintaining the exchange of 1.6 newly issued own shares for each MPS security. With this revision, the total value of the transaction rose to around 34 billion euros, compared with the initial 30.6 billion.
In June, after Intesa Sanpaolo's plans became known, MPS's board gave the green light to the launch of two "simultaneous and parallel" offers to take over Banco BPM and Banca Generali, for an aggregate amount close to 34 billion euros, with the aim of strengthening its size and neutralizing the rival takeover bid.
However, the shareholders' rejection has greatly weakened the ability of MPS's board of directors to deploy its defensive measures against Intesa. From now on, these same investors will have to decide whether or not to tender during the acceptance period of the takeover bid, whose start date has not yet been set, although the European Central Bank (ECB) has already granted its approval to the transaction.