€34.02 billion is what Banca Monte dei Paschi di Siena put on the table Friday: €25.3 billion for Banco BPM and €8.72 billion for Banca Generali, the two figures summing to the headline. Both are all-share offers, launched as Monte dei Paschi simultaneously defends against a cash-and-stock takeover from Intesa Sanpaolo, which entered the picture in June.
The proposed combination would rank Monte dei Paschi as Italy's third-largest bank by total assets. The bank projects a pro forma balance sheet of roughly €466 billion ($545 billion), with total financial assets it expects would exceed €810 billion across banking, advisory and wealth management lines.
Run-rate and accretion
Projected annual run-rate synergies sit at approximately €2.6 billion, including €800 million attributed to the Mediobanca integration, consistent with prior guidance. The bank expects 11% accretion in 2028 earnings per share. Completion is targeted by mid-February.
Exchange terms: 1.567 Monte dei Paschi shares per Banco BPM share, covering up to 1.52 billion Banco BPM shares, priced as a combination of equals at market. Banca Generali comes at 6.958 Monte dei Paschi shares per share, which the bank says implies a 10% premium to Wednesday's close.
Monte dei Paschi is also offering its own shareholders an extraordinary distribution of €4 billion: €1 billion in cash and €3 billion in Assicurazioni Generali shares, about 4.5% of that insurer's capital. The bank holds a 13.3% stake in Assicurazioni Generali; CEO Luigi Lovaglio has called it "nice-to-have" but acknowledged the position has drawn outside interest.
Shareholder arithmetic
Italy's passivity rule, triggered by the Intesa bid, means Lovaglio needs two-thirds of Monte dei Paschi shareholders to approve the plan. A meeting is set for Oct. 29.
Winning also requires agreement from target shareholders. Crédit Agricole holds nearly 30% of Banco BPM. Assicurazioni Generali is the majority owner of Banca Generali. Neither the French bank nor the insurer has publicly committed.
Italy's government has indicated it wants a third national banking champion after Intesa and UniCredit and has said it does not want Monte dei Paschi broken up. The three-way structure serves that political preference and gives the bank, which nearly collapsed a decade ago, a scale that would make it difficult to absorb.
The €3 billion Assicurazioni Generali tranche in the extraordinary distribution simultaneously reduces Monte dei Paschi's stake in the very position Lovaglio acknowledged attracts buyer interest.