Shares in Banca Generali rose 1% on Wednesday after Italian financial daily Il Sole 24 Ore reported that Monte dei Paschi di Siena (MPS) CEO Luigi Lovaglio is preparing two potential share-swap proposals that would involve Banco BPM and Banca Generali. The proposed deals are being framed internally as alternatives to the unsolicited takeover bid launched by Intesa Sanpaolo.
According to the newspaper, which cited unnamed banking sources, the proposals are still at the CEO planning stage and have not been formally presented to MPS’s board. The report added that some directors close to Lovaglio have already been made aware of the initiative and that an imminent meeting of interested parties is possible.
This development follows comments last week from Italian Prime Minister Giorgia Meloni, who told financial daily Milano Finanza that she hopes MPS will not end up "dismembered" as a consequence of Intesa’s approach. The prime minister has repeatedly framed MPS’s reprivatization as an opportunity to strengthen competition in Italian banking by helping establish a third major player alongside Intesa and UniCredit.
MPS, which was rescued by the Italian state in 2017 and later reprivatized through transactions completed in 2023-2024, became the target of an unsolicited takeover bid from Intesa Sanpaolo in June. That offer was initially valued at roughly 30.6 billion. Intesa’s bid followed an earlier proposal by Banco BPM for a so-called "merger of equals" with MPS, which briefly set off a bidding contest for control of the bank.
Banco BPM subsequently halted its pursuit of MPS after its largest shareholder, France’s Cr e9dit Agricole, said it did not see how a tie-up between the two mid-sized lenders would deliver value for BPM shareholders. The shareholder opposition from Cr e9dit Agricole played a key role in ending that avenue of consolidation.
The stakes in the contest extend beyond the banks themselves. MPS became the largest shareholder in insurer Generali after completing an acquisition of rival Mediobanca in a deal finished in December, leaving MPS with an approximate 13% holding in the insurer. That stake has been described as one of the key assets implicated in the broader struggle for control of MPS.
Under the terms reportedly outlined by Intesa, the bank would divest half of MPS’s branch network, along with its Siena headquarters and the MPS brand, to insurer Unipol. Unipol would then fold those assets into BPER, a lender it already owns. The structure proposed by Intesa is central to the concerns about how MPS might be reorganized if the bid succeeds.
Market data snippets included in trading screens this week showed a mix of movements across related tickers, with intraday indicators listing CAGR -1.5%, ISP -0.12%, UNPI -0.1%, BMPS -0.22%, BAMI +1.08%, EMII -0.38% and BGN +1.13%.
What to watch next
- Whether Lovaglio formally presents the share-swap proposals to MPS’s board and the timing of any meeting involving directors alerted to the plan.
- Responses from Banco BPM and Banca Generali management and shareholders to any formal proposal, should one be filed.
- Political commentary from Rome and any government signals about the desired structure of MPS’s reprivatization.