Monte dei Paschi says Intesa's bid premium is too low

• MPS board determined Intesa's bid premium (roughly 30% over prior-day price, 41% over one-month weighted average) falls below comparable Italian banking deals
• The bank is simultaneously assessing a separate merger proposal from rival Banco BPM, which it believes 'deserves a comprehensive and rigorous assessment'
• Market values of MPS and Banco BPM have diverged sharply since the competing proposals emerged, complicating deal valuations

Summary

Key Development: Monte dei Paschi di Siena (MPS) has rejected Intesa Sanpaolo's €30.6 billion ($34.9 billion) unsolicited takeover bid, citing an insufficient premium. MPS board stated the premium falls below the average for comparable Italian banking sector deals, which typically stand at approximately 30% over the official pre-announcement price and 41% over the one-month volume-weighted average price.

Companies Involved:

• Monte dei Paschi di Siena (MPS) – Italy's oldest bank and takeover target
• Intesa Sanpaolo – Bidding institution
• Banco BPM – Submitted competing merger proposal
• Credit Agricole (France) – Main shareholder in Banco BPM

Current Status: MPS announced Thursday that its board will conduct comprehensive assessments of both proposals. The bank emphasized that Banco BPM's combination proposal "deserves a comprehensive and rigorous assessment," though no detailed deal structure has been disclosed. Market values of MPS and Banco BPM have diverged sharply since the competing proposals emerged.

Market Implications: This development signals potential consolidation in Italy's banking sector, with MPS—historically troubled—now positioned as a strategic asset. The competing bids could trigger a higher valuation for MPS shareholders. The rejection suggests MPS management believes better terms are achievable, either through improved Intesa terms or the alternative Banco BPM merger. The situation remains fluid as both suitors vie for control, with significant implications for Italian banking sector consolidation and competitive dynamics.

Timeline: Intesa's bid was unveiled last month; MPS board statement issued July 16.