Advisers for Banca Monte dei Paschi di Siena and Banco BPM are exploring a merger combining cash and shares as an alternative to Intesa Sanpaolo's bid for Monte Paschi. The proposed structure would leave shareholders with ownership stakes reflecting the two banks' current market valuations, according to people familiar with the matter.
Advisers for Banca Monte dei Paschi di Siena and Banco BPM are exploring a merger combining cash and shares as a potential alternative to Intesa Sanpaolo's offer for Monte Paschi, Bloomberg News reported Monday.
The advisers are working on a structure that would leave shareholders with ownership broadly reflecting the two banks' current valuations, the report said, citing people familiar with the matter. The exact mix of cash and equity has not been finalized, the people said.
Banca Monte dei Paschi di Siena and Banco BPM declined to comment on the report. Reuters could not immediately verify the report.
The proposed tie-up would create a combined Italian banking group with greater scale to compete against larger domestic and European rivals. Intesa Sanpaolo launched a bid to acquire all shares of Monte Paschi in June, setting the stage for a potential contest for the world's oldest bank. Any agreement between Monte Paschi and Banco BPM would require approval from Italian regulators and the European Central Bank, with the deal's structure still under discussion.
Monte dei Paschi has been at the center of Italian banking consolidation after a series of state rescues. The Italian government still holds a stake in the lender following a bailout in 2017. A merger with Banco BPM would offer an alternative to Intesa Sanpaolo's takeover approach, potentially preserving more local control in Siena, where the bank was founded more than 550 years ago.
Banco BPM, Italy's third-largest bank by assets, has been seeking growth opportunities to strengthen its competitive position against larger rivals Intesa Sanpaolo and UniCredit. A combination with Monte dei Paschi would expand its branch network and customer base, particularly in central Italy where Monte dei Paschi maintains a strong presence.
The emergence of a competing deal structure introduces uncertainty into Intesa Sanpaolo's bid for Monte Paschi. If the Monte dei Paschi-Banco BPM merger proceeds, it would alter the competitive dynamics of Italian banking, creating a stronger No. 3 player capable of challenging the market leaders. Investors and regulators will be watching closely as the advisers refine the deal terms in the coming weeks.
European banking M&A has gained pace as lenders seek scale to invest in technology and compete with larger U.S. peers. A successful combination of Monte dei Paschi and Banco BPM would add to a wave of consolidation reshaping the region's financial landscape.
This article is for informational purposes only and does not constitute investment advice.
