Italy’s biggest bank, Intesa Sanpaolo, has moved closer to taking control of Monte dei Paschi di Siena after Delfin, the family holding company owned by the Del Vecchio family, agreed to tender its 17.6% stake under Intesa’s improved €35 billion ($39 billion) offer.
Delfin’s commitment removes a significant block of uncertainty around the proposed takeover as Intesa seeks to overcome a defensive plan put forward by MPS Chief Executive Luigi Lovaglio.
Intesa said late on Sunday that Delfin had committed to tendering its entire MPS holding into the offer. The agreement is significant because Delfin is MPS’s largest shareholder and its decision gives Intesa a major shareholder publicly aligned with the takeover.
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The transaction is the latest and potentially most consequential stage of a banking consolidation drive that has reshaped Italy’s financial sector over the past two years.
Intesa increased the attractiveness of its proposal on Saturday by offering MPS shareholders an additional €800 million in cash if they reject Lovaglio’s alternative plan. The additional payment increases the cash component of Intesa’s offer from €3 billion to €3.8 billion, a 25% increase in the cash portion and an overall improvement of about 2.3% based on Friday’s closing price.
The sweetener has changed the choice facing MPS investors from simply deciding whether to accept Intesa’s takeover to deciding whether to preserve an alternative route for the bank at the risk of losing the improved offer altogether.
Under Italian takeover rules, MPS shareholders must approve any defensive strategy that could prevent or obstruct Intesa’s bid.
Lovaglio has asked shareholders to approve his plan at a meeting scheduled for October 29. He has argued that investors should support the proposal even if they ultimately intend to tender their shares to Intesa, because maintaining an alternative transaction could put pressure on the bidder and potentially lead to better terms.
Intesa has now made clear that it does not intend to negotiate indefinitely.
Late on Saturday, the bank said it would withdraw its offer if MPS shareholders approve Lovaglio’s defensive strategy on October 29. That condition effectively creates a binary choice for shareholders: reject the defensive plan and retain access to Intesa’s enhanced offer, or approve Lovaglio’s strategy and risk losing the Intesa transaction altogether.
Delfin’s Decision Changes The Balance
Delfin’s commitment is required because of the identity of its owner. The holding company is controlled by the Del Vecchio family, which also controls EssilorLuxottica, the world’s largest eyewear company. Its 17.6% MPS stake gives Delfin considerable influence over the outcome of the takeover battle.
Intesa said Delfin has committed to rejecting Lovaglio’s defensive plan at the October 29 shareholder meeting and tendering its MPS shares into Intesa’s offer. That commitment means one of the most influential shareholders has effectively chosen Intesa’s proposal over maintaining the alternative strategy put forward by MPS management.
For Lovaglio, the challenge is now to persuade enough of the remaining shareholder base that keeping an alternative transaction alive could ultimately produce greater value than accepting Intesa’s enhanced terms.
His strategy had sought to prevent Intesa from completing the takeover on its original terms and preserve negotiating leverage for MPS shareholders. But Intesa’s decision to attach a withdrawal condition to the October 29 vote raises the cost of pursuing that route. The move also demonstrates how takeover battles can shift rapidly when a bidder changes the economic terms while simultaneously narrowing the conditions under which it will remain at the table.
Intesa’s additional €800 million is relatively modest compared with the overall value of the transaction, but its structure is important. The money is conditional on shareholders rejecting the defensive plan, meaning the sweetener directly links shareholder voting behavior to the value they receive from the offer. That creates a stronger incentive for shareholders to oppose the alternative strategy, particularly those that view certainty of value as more important than maintaining the possibility of extracting additional concessions.
A Defining Deal for Italy’s Banking Consolidation
The battle for MPS is the culmination of an extended restructuring of Italy’s banking sector, where lenders have increasingly pursued mergers and acquisitions to improve scale, profitability and competitiveness.
MPS itself has undergone a lengthy transformation after years of financial problems and state intervention. Its return to private ownership and subsequent emergence as a takeover target reflects the broader rehabilitation of an institution that once represented one of Europe’s most prominent banking crises.
For Intesa, acquiring MPS would further strengthen its position in the Italian banking market and consolidate an industry that has become considerably more concentrated through recent transactions.
The size of the offer also makes the deal important beyond the immediate shareholder vote. At €35 billion, Intesa is committing substantial capital to a transaction that would reshape its domestic footprint and potentially produce additional economies of scale. But the outcome still depends on the October 29 vote. Delfin’s decision improves Intesa’s position, but the remaining shareholders will determine whether Lovaglio’s defensive plan receives the authorization required under Italian takeover rules.
The major issue investors are to contend with hinges on ascertaining that Intesa’s improved proposal outweighs the potential negotiating leverage offered by keeping an alternative strategy alive. Intesa has removed some of that uncertainty by making its position explicit: approval of Lovaglio’s defensive plan would cause the €35 billion bid to disappear.
Delfin’s commitment to reject the plan means the largest shareholder has already chosen its side.