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Italy counting on M&A deal to cut MPS stake, favours BPM merger, sources say
Italy counting on M&A deal to cut MPS stake, favours BPM merger, sources say
About this update from Banco Bpm Spa
By Giuseppe Fonte and Valentina Za Italy will hold onto its remaining 4.9% stake in bailed-out bank Monte dei Paschi di Siena (MPS) MIL:BMPS while the lender incorporates its recently-acquired rival Mediobanca, two sources close to the matter told Reuters.But Giorgia Meloni's government is counting on another future merger deal to eventually cut the shareholding, the sources said, adding that Rome sees Banco BPM MIL:BAMI as the favoured partner.Italy, which obtained 68% of MPS as a result of a 2017 bailout, has cut its stake through a series of share placements over the past two years and, lastly, MPS' takeover of Mediobanca.Partly paid for through newly issued shares, the Mediobanca deal reduced the value of the stakes held by MPS' investors.NEW ROUND OF BANKING CONSOLIDATION AWAITEDThe Treasury's current residual shareholding already meets re-privatisation commitments Rome agreed with the European Commission to clear the bailout.However, Rome has not given up on a long-held plan to combine MPS with Banco BPM MIL:BAMI, the two sources said, speaking anonymously as deliberations are private.Both MPS and BPM declined to comment.UniCredit MIL:UCG derailed Rome's plan for an MPS-BPM tie-up in November last year by launching a bid for BPM, which has now collapsed.Banco BPM CEO Giuseppe Castagna has said the two merger options for his bank are MPS and France's Credit Agricole EURONEXT:ACA.BPM holds 3.7% of MPS, while Credit Agricole is a commercial partner of BPM and its biggest investor with a 20.1% stake. The Paris-listed lender hiked the stake with Rome's blessing to help BPM fend off UniCredit, ensuring sway over any future BPM moves."If we were to be approached by Banco BPM for a combination, we would view this very favourably," Credit Agricole's CEO Olivier Gavalda told investors on Tuesday.The integration of Mediobanca is set to keep MPS busy for some time, the sources said. After the process is completed, the Treasury is open to supporting a new merger for the Tuscan bank, with Rome focusing its attention on BPM, they added.MPS CEO Luigi Lovaglio has repeatedly said that a new round of consolidation awaits the sector in a couple of years, after the current M&A wave.He told analysts this month that for now a "strategically important" priority for the bank is strengthening its commercial ties with Anima, the BPM-owned fund manager MPS partners with.ITALY...