Mps launches bids on Banco Bpm and Banca Generali for a total of 34 billion

Monte Paschi di Siena (Mps) has launched voluntary public exchange offers for the entire share capital of Banco BPM and Banca Generali, valued collectively at approximately €34 billion. The offers, which will be conducted entirely in shares, aim to acquire all ordinary shares of both banks. According to a statement released by Mps, the offer for Banco BPM carries a value of around €25.3 billion, while the one for Banca Generali is estimated at €8.72 billion. The proposal for Banco BPM involves offering 1.567 new shares of Mps for each existing share of the Milan-based bank. This valuation sets the institution led by CEO Giuseppe Castagna at €25.35 billion. In contrast, the offer for Banca Generali includes a premium of 10% over the official prices recorded on August 19, with a conversion rate of 6.958 new Mps shares for each Banca Generali share. Mps expects the exchange offers for both banks to conclude by mid-February 2027, pending regulatory approvals. The effectiveness of these offers depends on achieving a minimum subscription level of 50% of the capital plus one share. Additionally, approval from Mps shareholders is required, with a shareholder meeting scheduled for October 29. The period for subscriptions is anticipated to begin in early December 2026 and end by early February 2027. The threshold condition can be waived under certain circumstances. If all current shareholders of Banco BPM and Banca Generali fully subscribe to the offers, considering the recent merger of Mediobanca into Mps, current Mps shareholders would hold approximately 50.1% of the combined group. Shareholders of Banco BPM would retain roughly 37.2%, and those of Banca Generali would hold about 12.7%. According to Mps, merging with Banca Generali marks the initial step toward broader industrial collaboration with the Generali Group, aimed at developing new growth opportunities in strategically relevant areas for both institutions. The plan to counter the potential takeover bid by Intesa Sanpaolo includes distributing €4 billion to Mps shareholders, partly in cash, €1 billion, and partly in Generali shares, €3 billion, equivalent to about 4.5% of Generali’s share capital based on current market prices. The proposed transactions with Banco BPM and Banca Generali are expected to generate annual pre-tax synergies of approximately €2.6 billion, with around €800 million coming from the integration of Mediobanka. A special dividend of €1.208 per Mps share is also planned, consisting of €0.302 in cash and €0.906 through the allocation of Generali shares determined based on the official price recorded on Euronext Milan at the relevant record date. Like the exchange offers, this dividend distribution requires approval from the shareholder meeting on October 29. Mps anticipates that the exchange offers for Banco BPM and Banca Generali will significantly improve profitability and operational efficiency. These initiatives are projected to distribute €15 billion in dividends between 2026 and 2030, including a special dividend of €4 billion reserved for current Mps shareholders. The payout ratio is expected to reach 100%. The return on tangible net assets is forecasted to rise from approximately 13% in 2025 to over 19% in 2029. Growth in earnings per share by 2028 is estimated at 11%, according to the company's projections.