Intesa reckons on shareholder backing for MPS bid, serves up competition solution

By Valentina Za, Elisa Anzolin and Giuseppe Fonte

MILAN, June 9 (Reuters) - Intesa Sanpaolo's confidence that its €30 billion ($35 billion) unsolicited bid for Monte dei Paschi di Siena will succeed is based on its good relations with leading MPS shareholders and a pre-baked remedy for competition issues.

The Italian government plans to take a neutral stance on the move, according to two sources familiar with the matter, which is likely to further hearten Intesa CEO Carlo Messina.

MPS' status as the world's oldest bank has helped to put it at the heart of a raft of M&A battles within Italy's banking sector over the past 18 months. 

Intesa made its move on the lender on Monday, acting swiftly after Banco BPM, the number four player in Italy, approached MPS about a merger.

Shares in Intesa rose 1.9% in early trading in Milan on Tuesday, after falling 1.4% in the previous session. Monte dei Paschi di Siena (MPS) gained 1.5%, extending Monday’s 13% rally.

With an eye on competition concerns, Intesa unveiled a separate deal to sell 635 MPS branches and the brand to insurer Unipol. This network would then be combined with lender BPER, in which Unipol is a leading shareholder, to create a bank that would operate under the MPS brand.   

"When a bank with the strength, history and tradition of Intesa Sanpaolo steps into the arena, it does not do so to play a friendly match, but with the determination to win," Unipol Chairman Carlo Cimbri told a press conference on Monday.

DELFIN AND CALTAGIRONE AS KINGMAKERS

In a brief statement late on Monday, MPS said it would assess both the Intesa bid and the BPM approach.

The bid was at only a modest premium of 12.5%, but Messina talked up its chances of success.

"We have very good relations with (top MPS shareholders) Delfin and (Francesco Gaetano) Caltagirone, and I expect they may take a positive stance towards this transaction," Messina said.

Delfin, the holding company of late EssilorLuxottica founder Leonardo Del Vecchio, has a 17.5% stake in MPS, while billionaire businessman Caltagirone has a 10% stake. Both have so far declined to comment on the issue. 

Il Messaggero, a daily newspaper owned by Caltagirone, indicated a preference for the Intesa deal in an article published on Monday, saying it would be better for the country's financial security.

Delfin is itself at the centre of a shareholder reshuffle, which could impact its decisions. 

Leonardo Del Vecchio, who died in 2022, divided Delfin equally among eight heirs, giving broad powers to a board chaired by EssilorLuxottica CEO Francesco Milleri.

Since then the heirs have struggled to reach agreement. In a bid to break the deadlock, Leonardo Maria Del Vecchio has offered to buy out two siblings in a €10 billion deal, a move that would lift his holding to 37.5%.

Delfin Chairman Milleri last year said the holding company invested in the Italian banks to support their growth, with a view also to strengthening the country’s economy.    

POLITICIANS AIM TO KEEP OUT OF IT

Intesa will be anxious to avoid the fate of closest domestic rival UniCredit which ditched a €15 billion bid for BPM last year in the face of government opposition.

Banking is a sensitive issue given the numbers of people it employs and the impact of mergers on services for people in communities across the country, as well as the banks' role in holding government debt.

The Unipol deal provides reassurance that the MPS name, which traces its roots back to 1472, will survive.

The League party, part of Prime Minister Giorgia Meloni's government, has previously been a backer of a potential MPS/BPM deal.

Italy has so-called "golden powers" allowing the government to rein in bank merger deals, but one of the sources said Prime Minister Giorgia Meloni's government would not use the legislation to derail Intesa's takeover plans.

($1 = 0.8663 euros)

(Additional reporting by Elvira Pollina and Gianluca Semeraro; Writing by Keith Weir; Editing by Jan Harvey)