ROME (Reuters) -Italy’s government gave its backing on Friday to Banca Monte dei Paschi’s (MPS) bid for merchant bank Mediobanca, as the proposed deal may strengthen the country’s banking system and its broader economy.
Economy Minister Giancarlo Giorgetti, a member of the right-wing League party, said the move by the bailed-out Tuscan lender was “totally transparent and in the interests of the Italian economy.”
The 13.3 billion euro ($13.97 billion) all-share offer comes after a year in which the Italian Treasury has sharply cut its stake in MPS, lining it up for an M&A deal and a return to the private sector.
Speaking at a League party gathering in northern Italy, Giorgetti praised MPS’s management team for its “excellent results” and said it was now up to the market to deliver its verdict on the proposed deal.
Foreign Minister Antonio Tajani, leader of the more moderate Forza Italia party, delivered a similar message.
“We stand for the free market. Any market initiative aimed at strengthening our banking system, which is already healthy, is welcome,” Tajani said.
Sources familiar with the matter said Prime Minister Giorgia Meloni’s administration believes the proposed MPS-Mediobanca tie-up would create a strong banking player without leading to job losses or branch closures.
MPS Chief Executive Luigi Lovaglio told an analyst call on Friday he had first discussed the possibility of such a deal with the economy ministry in late 2022 – signalling he had the Rome government’s blessing over the transaction.
“I met our economy minister [on Dec. 16, 2022] for an update on strategic options for the future: a stand-alone one, a merger of equals and, as a third option, a transformational transaction with Mediobanca,” Lovaglio said.
“And now it is the right moment and there are all the conditions for capturing that third option, which is the best one in this competitive landscape,” he added.
Tajani said it was important to carry on with the full privatisation of MPS. The government still owns an 11.7% share in the bank, compared with an initial 68% it took after a 2017 state rescue.
Giorgetti promised a “definitive exit” from MPS in the future, adding that “the state should not be a banker.”
($1 = 0.9519 euros)
(Reporting by Angelo Amante, Valentina Za, Giuseppe Fonte; Editing by Louise Heavens and Gavin Jones)
