Monte dei Paschi makes €34bn twin bank bids

Italian bank Monte dei Paschi di Siena launched all-share bids Friday to buy Banco BPM and Banca Generali, seeking to fend off a hostile takeover by rival Intesa Sanpaolo.

Monte dei Paschi said the bids, worth about €34 billion ($40 billion) in total, aim to create Italy's third-largest banking group by total assets, spanning banking, advisory and wealth management.

MPS valued Banco BPM at €25.3 billion and Banca Generali at €8.7 billion. It said the deal would produce about €2.6 billion a year in pre-tax synergies and create a group with about €810 billion in total financial assets.

As part of the offer, MPS proposed an exceptional €4 billion payout to its own shareholders in cash and Generali shares.

MPS chief executive Luigi Lovaglio is trying to counter a €31 billion takeover bid from Intesa Sanpaolo, announced in June, that helped set off consolidation moves in Italy's banking sector. The MPS plan needs approval from a majority of its shareholders at a meeting in October.

Founded in Siena in 1472, MPS was rescued in 2017 through a €5.4 billion bailout by the Italian state, which later reduced its stake. The bank returned to stronger footing and last year became Italy's third-largest bank after buying Mediobanca.

Banco BPM approached MPS in June to propose a merger, but the talks ended last month without a deal.