Intesa Sanpaolo has raised the stakes in its proposed takeover of Monte dei Paschi di Siena, offering MPS shareholders an additional €800 million ($900 million) in cash if they reject the Italian lender’s rival expansion plan.
The move escalates a high-stakes battle over the future of MPS and adds another layer to Italy’s rapidly consolidating banking sector, where a series of deals over the past two years has reshaped competition among the country’s lenders.
Intesa said on Saturday it would increase the cash component of its offer to €1.25 per MPS share, up from €1. Shareholders would also receive 1.6 newly issued Intesa shares for every MPS share they tender.
Register for the next Tekedia Mini-MBA.
Register for Tekedia AI in Business Masterclass.
Join Tekedia Capital Syndicate and co-invest in great global startups.
The revised terms represent Intesa’s latest attempt to persuade MPS investors to back its €34 billion share-and-cash takeover, which was announced in June and is the largest transaction so far among roughly a dozen banking deals in Italy during the past two years.
The enhanced offer comes ahead of an October 29 shareholder vote at MPS, where Chief Executive Luigi Lovaglio is seeking approval for an alternative strategy that would allow the bank to pursue its own expansion rather than accept Intesa’s bid. Lovaglio unveiled the counter-plan in August. It calls for MPS to make two separate all-share takeover offers for wealth manager Banca Generali and rival lender Banco BPM, effectively positioning MPS as an active consolidator rather than a takeover target.
The vote has become central to the contest because Italian takeover rules require Lovaglio to obtain shareholder approval before advancing the counter-plan.
Intesa said that if MPS shareholders approve either of the two proposed acquisitions on October 29, it would have the right to withdraw its own takeover offer under the conditions attached to the bid.
The bank made clear, however, that it does not intend to waive those conditions.
“Intesa Sanpaolo does not intend to exercise the right to waive the conditions … and will claim for their non-fulfilment,” it said.
That position raises the stakes of the shareholder vote. MPS investors are effectively being presented with competing visions: accept Intesa’s offer and become shareholders in a much larger banking group, or back Lovaglio’s strategy, which would seek to build MPS through acquisitions of Banca Generali and Banco BPM.
The increased cash component gives shareholders an additional financial incentive to choose Intesa’s proposal. Under the revised terms, investors who tender their MPS shares would receive €1.25 in cash for each share alongside the 1.6 newly issued Intesa shares.
The structure means the contest will depend not only on the headline value of Intesa’s offer but also on investors’ assessment of the future value of Intesa shares versus the potential returns from Lovaglio’s expansion strategy.
For MPS, the counter-plan would represent a significant change from its recent transformation. The bank has spent years rebuilding its balance sheet and reducing the legacy problems that made it one of the most troubled lenders in Europe following its 2017 state rescue.
Lovaglio’s strategy suggests management believes MPS can use its improved financial position to participate directly in Italy’s consolidation rather than surrender its independence to a larger rival.
The proposed acquisition of Banco BPM would be particularly significant because it would combine two major Italian banking franchises. Banca Generali, meanwhile, would give MPS a larger presence in wealth management, an increasingly important source of relatively stable fee income for banks seeking to reduce their reliance on lending margins.
But pursuing both transactions would also require MPS shareholders to accept the risks associated with a substantially more ambitious growth strategy.
Intesa’s approach offers a different proposition. Rather than asking MPS investors to finance additional acquisitions and wait for the benefits of integration, the revised bid provides immediate cash alongside shares in Intesa. The €800 million increase in the cash component therefore serves both as a direct enhancement of the offer and as a challenge to Lovaglio’s argument that MPS can create greater value by remaining independent.
The battle also illustrates the changing structure of Italian banking. A prolonged period of consolidation has encouraged lenders to pursue greater scale as they seek to improve efficiency, strengthen their ability to invest in technology and compete for customers and wealth-management assets.
The MPS contest is particularly consequential because of the institutions involved. Intesa is Italy’s largest bank, while MPS, founded in 1472, is the world’s oldest surviving bank and has become a symbol of the country’s difficult banking history.
The outcome will therefore determine more than the ownership of MPS. It could influence the next phase of consolidation in Italy by establishing whether shareholders favor a large-scale combination led by Intesa or a more aggressive independent strategy under Lovaglio. The October 29 vote is now likely to be the decisive battleground. Intesa has raised the immediate financial value of its proposal, while MPS management is asking shareholders to endorse a strategy that would transform the bank into an acquirer itself.
The competing offers now leave investors with a fundamental choice over MPS’s future: join a larger banking group under Intesa or accept the execution and integration risks of an independent expansion plan built around Banco BPM and Banca Generali.