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Monte dei Paschi's public exchange offer on Mediobanca is sparking several debates among investors and financial analysts, who are wondering first and foremost what its future impact on the Italian banking system would be.
Shareholders at the heart of the operation
The main players in the MPS-Mediobanca operation are Milleri and Caltagirone: two entrepreneurs and shareholders with important roles in both banks. It is therefore quite clear that the interests at stake are not limited to the mere reorganization of the bank, but go much further. After all, both Milleri and Caltagirone have never hidden their interest in Generali.
The general economic picture
The banking system is being called upon to rethink its operating models in the face of a changing economic environment. The ECB is gradually reducing extraordinary measures, with rates expected to be around 2% by the end of 2025.
The general economic picture forces banks to rethink their business models. A context that is very well summarized by Angelo Ciavarella, an expert in financial markets:
“This is not a simple banking operation, but a complex move,” explains Ciavarella. “The real target seems to be Generali, rather than Mediobanca itself, however today’s data on MPS’s Net Interest Income (NII) certainly shifts the focus. This indicator – which measures a bank’s ability to generate profits – is showing the first signs of criticality with a 2025 consensus at -9% which should encourage the company to focus more on its core business rather than on a complicated operation, going on to acquire a much larger prey than itself”
From Ciavarella's careful analysis another crucial aspect clearly emerges, that is, the poor value of MPS's communication, which does not dispel all the - legitimate - doubts regarding the industrial nature of the operation.
It is basically difficult to understand why one should value the company by nullifying the actual value of one of its assets. This move appears more like another tactical step in a chess game that is still far from being concluded.
Market reactions
For their part, investors are proving to be attentive: they are following the development of the operation with understandable caution and yesterday, after the presentation of the annual financial statements, they began selling MPS again.
If we look at yesterday's stock prices, the gap between the exchange ratio of MPS's offer and the stock market values has widened to 10,2%. In practice, if today Monte dei Paschi were to aspire to relaunch with a cash component on Mediobanca, it would have to sustain an expense of 1,4 billion euros just to match the stock market values. To these would be added at least the same amount to pay a premium.
It is therefore clear that what we are talking about would be an excessive expense for a bank still in the recovery phase.
Conclusions and final observations
The takeover bid between Monte dei Paschi and Mediobanca is not a simple financial move: this operation could substantially redefine the Italian banking system.
“The real challenge will be to demonstrate that this move goes beyond the contingency and is part of a medium-long term strategy that no one sees today”. This is the concluding observation of Angelo Ciavarella.