Monte dei Paschi criticises Intesa Sanpaolo's offer as inadequate, advances talks with Banco BPM

Board criticises Intesa's offer as inadequate

The board of Banca Monte dei Paschi di Siena, chaired by Cesare Bisoni and led by CEO Luigi Lovaglio, met on 16 July and delivered a sharply critical preliminary assessment of Intesa Sanpaolo's voluntary public exchange offer. The offer, launched on 5 June, proposes 1.6 newly issued Intesa shares plus €1 in cash for each MPS share, valuing the target at €30.6 billion. According to advisors UBS Europe and BofA Securities, the implied premium of 12.5% over the official price on 5 June 2026 and 11.8% over the one-month weighted average price falls well short of the 30% and 41% averages recorded in previous Italian banking sector voluntary offers.

The premium offered appears lower than the average level of premium observed in public offers in the Italian banking sector.

The board also argued that the offer would give MPS shareholders only a limited share of the €2.9 billion in annual synergies projected by Intesa, with most of the value created accruing to the offeror. It further noted that the consideration does not adequately reflect the change of control or the subsequent break-up of MPS.

Unipol branch sale under scrutiny

A central element of Intesa's plan is the sale of approximately 635 MPS branches to Unipol, intended to address competition concerns. The MPS board highlighted that Unipol would pay €3–3.5 billion in cash, roughly 10% of the total implied value of MPS, for a perimeter that generated €400–460 million in net profit in 2025, equal to about 18% of the bank's total net income. The transaction implies a price/earnings multiple of around 7.6 times, below the average valuation multiples observed for Italian banks.

A higher valuation of the transferred business could have generated incremental proceeds and supported a higher overall consideration or premium for MPS shareholders.

The board's statement questioned whether the Unipol deal fairly allocates value, suggesting that a richer valuation of the divested assets would have benefited MPS investors.

Antitrust and regulatory hurdles

MPS raised substantial concerns about the competitive impact of the acquisition. The board warned that the transaction would further strengthen the position of Italy's largest financial group across numerous business segments, increasing concentration in the production, advisory and distribution of financial products and services. Even after the branch sale to Unipol, the deal would remain subject to assessments by competent authorities and possible corrective measures, creating uncertainty over the final perimeter, execution timeline and value allocation.

Additional uncertainty surrounds Intesa's indirect stake in Generali, held through MPS's 13.1% interest in Mediobanca. The board noted that both companies play a significant role in the Italian life insurance market, and regulatory reviews could affect competitive balances, governance arrangements and commercial strategies.

Banco BPM alternative gains traction

In parallel, the board decided to proceed with a thorough technical evaluation of the merger proposal presented by Banco BPM on 7 June, the same day as Intesa's hostile Opas. Unlike the Intesa plan, the BPM proposal is built on valuing the entire MPS group without breaking up its activities, distribution network or brand.

The board believes the merger proposal deserves a thorough and rigorous examination, also because it envisages a possible industrial transaction based on the valorisation of the entire perimeter of Banca Mps and does not presuppose the disaggregation of the bank's activities, distribution network and brand.

The board stressed the need to fully understand the industrial rationale, financial sustainability, capital impact and long-term value creation potential for shareholders, as well as implications for clients, employees and the territories served by the bank.

What comes next

Intesa Sanpaolo is expected to respond to the MPS board's observations as early as 17 July. CEO Carlo Messina had already defended the offer on 15 July at the ABI assembly, stating that the price is the maximum possible and comparing MPS's price/earnings ratio to those of Morgan Stanley and Goldman Sachs. The MPS board will continue its analysis with the support of its financial advisors, while the market watches whether Intesa will improve its terms or whether the Banco BPM alternative gains further momentum.